Market Monitor: Healthcare
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Market Monitor: Healthcare
U.S. Healthcare Services M&A Transactions Decrease in Early 2025
Through April 2025, there were 186 U.S. healthcare services M&A transactions, marking a 21.2% decrease compared to the same period in 2024. This decrease reflects broader industry trends and economic factors affecting the sector.
Physician Medical Groups Segment Faces Challenges
The Physician Medical Groups segment saw a significant decline in transaction activity. This is largely attributed to increased regulatory oversight and concerns about market consolidation, which are leading to fears of reduced competition within the industry.
Rising EV/EBITDA Multiples Signal Market Resilience
Despite a slowdown in overall transaction activity, the median EV/EBITDA multiples for publicly traded healthcare services companies have risen from 12.3x to 13.7x since the start of 2025. This uptick suggests a resilient market for high-quality healthcare companies, even amidst a slowdown in M&A deals.
Factors Driving Future Healthcare M&A Activity
The healthcare industry is generally less impacted by changes in consumer spending habits, providing some stability in uncertain times. Several favorable M&A drivers are expected to support deal activity in the second half of 2025, including:
Adoption of new healthcare technologies
Stable or decreasing interest rates
Overall market dynamics
Availability of capital
These factors are expected to create a rebound in deal activity, positioning the healthcare services sector for growth in the latter part of 2025.
If you have any questions, please contact our contributors:
Paul Kacik, Managing Director: pkacik@hexagoncapitalalliance.
Brad Erhart, Director: berhart@