Global healthcare merger and acquisition (M&A) activity rebounded strongly in 2025, with deal value rising 38% to US$546.7bn, marking one of the strongest years since the post-pandemic peak.
However, within this broader upswing, mid-market healthcare M&A showed more modest growth.
The latest review of global healthcare M&A by Baker Tilly International, produced in conjunction with Mergermarket, shows mid-market deal value increased 2% to US$105bn, marking the third consecutive year of growth since 2023, but trailing the wider mid-market (all sectors), where deal value rose 7%.
The divergence is even more evident in volumes.
Mid-market healthcare deal volume fell 3%, while the broader mid-market grew by 4%.
This highlights a clear shift: fewer transactions are being completed, but at higher average values, pointing to increased selectivity and a tighter pool of high-quality healthcare assets.
"We’re at an inflection point where the convergence of demographic pressure, technological disruption and AI, and capital availability is creating an undeniably positive environment for M&A. The strategic logic for consolidations and add-on acquisitions has never been stronger and executives who approach 2026 with a clear M&A thesis and the discipline to execute on the right deals will have a meaningful competitive advantage in the healthcare space going forward."
Macro trends, compliance and technology gaps drive a new wave of deals
Ageing populations, rising chronic disease and ongoing cost pressures are sustaining long-term demand for healthcare assets.
These fundamentals are supporting valuations and keeping dealmakers active, particularly in the mid-market, and will remain key drivers into 2026 and beyond.
Portfolio restructuring by large strategics
Large pharmaceutical, medical technology and healthcare groups are divesting non-core and sub-scale assets, creating a steady pipeline of mid-sized targets. These carve-outs often have established revenues and infrastructure but require focused ownership, making them highly attractive to mid-market buyers and sponsors.Shift to outpatient, home and virtual care
The shift from inpatient to outpatient, home and virtual care has driven the emergence of more mid-sized, focused businesses. Ambulatory surgery centres, remote monitoring and virtual care platforms are often mid-market in scale, with consolidation quickly creating regional leaders.Regulatory and reimbursement complexity
Heightened regulatory scrutiny and antitrust risk may limit large transactions, particularly in provider and payer markets. Mid-market deals are often more executable, face fewer competition concerns and are easier to integrate, while still delivering meaningful local scale.Artificial intelligence (AI)-enabled healthcare as a key differentiator
AI has moved from emerging theme to core investment driver. Mid-market dealmakers are targeting businesses with embedded AI and digital capabilities, using bolt-on acquisitions to add workflow automation, analytics and patient engagement tools, without the premium attached to scaled technology assets.Cross-border M&A as a growth lever
Cross-border dealmaking is now a strategic priority, not an opportunistic play. Access to new technologies, diversified deal pipelines and expanded patient markets is driving conviction that international M&A is critical to long-term value creation.
What’s next?
Looking ahead to 2026 and beyond, dealmakers remain cautiously optimistic.
Recent successful public offerings signal improving exit pathways and renewed investor confidence. Policy developments may provide regulatory clarity that unlocks deals currently on hold, while sub-sectors aligned with ageing demographics, AI-enabled productivity and value-based care present compelling opportunities.
The fundamental challenge for dealmakers will be this: separating sustainable growth platforms from assets exposed to industry headwinds and regulatory risk.
Here to close the deal you’ve been planning – or bring the targets that will add real value to your business.
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