Mid-market healthcare M&A rebounds as dealmakers pursue fewer, higher-conviction transactions

• Mid-market healthcare M&A value rose to US$105bn in 2025, up from US$103.2bn in 2024
• Mid-market healthcare M&A volume totalled 1,037 deals in 2025, down from 1,066 in 2024

Global mid-market healthcare mergers and acquisitions (M&A) remained resilient in 2025 with deal value edging up to US$105bn in 2025 from US$103.2bn in 2024. New research from Baker Tilly International, developed in conjunction with Mergermarket, shows while deal volume dipped to 1,037 deals from 1,066, there continues to be competitive appetite for proven healthcare platforms, even as buyers become more disciplined on price, integration risk and regulatory complexity.

Healthcare’s overall share of mid-market activity softened slightly. In 2025, healthcare accounted for 11% of all mid-market deals, down from 12% in 2024. This shift reflects a market where capital is still available but is being deployed more selectively in assets with defensible market positions and clear growth runways.

By comparison, global healthcare M&A made a strong comeback in 2025, with global deal value climbing 38% year-on-year to US$546.7bn up from US$396.2bn in 2024. Despite the jump in investment, overall activity remained selective, as global deal volume fell to 4,018 deals down from 4,209 in 2024.

Harsh Maheshwari, global head of advisory, Baker Tilly International, explains:

AI accelerates platform differentiation in healthcare

AI is increasingly influencing healthcare deal rationales, particularly where it can improve clinical decision support, automate workflows and help unlock value from real-world data. Buyers are gravitating towards targets that can demonstrate clear pathways to deploy AI responsibly, through strong data governance, validated models and scalable product integration, rather than treating AI as a standalone bolt-on.

Mr Maheshwari adds: “AI and medical technology are converging to produce a new category of devices that learn, adapt and generate continuous clinical intelligence.

Dealmakers are paying premiums for that capability because building it internally is simply not realistic at the speed the market is moving.”

Private equity focuses on fewer, higher-conviction healthcare plays

Private equity (PE) remains an important force in mid-market healthcare, but underwriting is increasingly centred on conviction and execution. Sponsors are prioritising platform acquisitions with repeatable add-on potential, clear reimbursement and regulatory pathways, and identifiable operational levers, such as margin improvement, network expansion and technology enablement, while moving quickly past assets with elevated integration or compliance risk.

At the same time, buyers are expanding beyond traditional hospital settings, with growing interest in behavioural health, physician groups, home-based care and other patient-centric models.

Asia Pacific is the standout performer

Asia Pacific emerges as a standout performer. The region was the second largest for healthcare deals in 2025, but more impressively, Asia Pacific posted year-on-year gains of 26% with value reaching US$28.8bn and 20% with value totalling 327 deals. The region’s momentum positions it as a primary growth driver in the mid-market space, potentially challenging North America for dominance in the coming years.

North America remains dominant, but interest is reversing course. While the region retained its position as the top market for mid-market healthcare M&A in 2025, it experienced steep double-digit year-on-year declines of 12% in value to US$48.5bn and 14% in volume to 456 deals.

Western Europe demonstrates more nuanced performance. The region’s share of healthcare deals mirrored its proportion of overall mid-market activity, suggesting healthcare deals may be tracking broader economic patterns rather than sector-specific dynamics. Deal values increased 18% year on year (reaching US$22.8bn) while volume was essentially flat (just 0.5% growth for 211 deals).

At the same time, cross-border dynamics continued to evolve: mid-market cross-border deal volumes decreased 6% in 2025, while deal values increased 3%, signalling a continued pivot towards larger, more strategic international transactions.

Western Europe emerged as the focal point for cross-border mid-market healthcare M&A in 2025, with inbound deal value rising 18% to US$16.4bn as buyers targeted the region’s mature healthcare systems and stable regulatory environment. By contrast, North America saw international interest soften, with inbound value down 14% year on year from US$14.8bn to US$12.7bn. Meanwhile, Asia Pacific strengthened its position as a core destination for global capital, with inbound value up 19% to US$8.4bn and inbound volumes surging 37% to 74 deals. This was alongside growing outbound ambition as Asia-Pacific bidders boosted overseas investment 18% from US$8.2bn to US$9.7bn, with outbound deal count edging up 1%.

Medical assets dominate mid-market activity

Across biotechnology, medical and pharmaceutical mid-market healthcare M&A, deal value and volume are relatively evenly distributed, pointing to a diversified opportunity set below the mega-deal tier. The medical sub-sector leads overall activity, accounting for 42% of mid-market deal value and volume, as fragmentation continues to support roll-up strategies and scalable platform builds through bolt-on acquisitions.

Biotechnology remains a steady feature of the mid-market, sustained by ongoing innovation cycles and continued interest in licensing and early acquisitions, although buyers are becoming more selective and increasingly prioritise assets that have cleared key scientific or regulatory milestones. Pharmaceuticals also delivers dependable deal flow, representing 22% of mid-market deal value and volume, reflecting a more mature and disciplined buyer landscape where valuation and strategic fit can temper volume.

The outlook for 2026

As macro conditions stabilise and confidence improves, Baker Tilly International experts expect healthcare M&A to remain active, particularly where targets offer scalability, operational resilience and exposure to structural demand themes. The buyers best positioned to win will be those prepared to pay strategic premiums for high-conviction assets, while remaining disciplined on valuation, execution risk and regulatory complexity.