Healthcare M&A Annual Review 2025

We are pleased to release our annual healthcare M&A review, analysing M&A and private equity activity across the UK healthcare sector in 2025.

The report highlights the most active sub-sectors within the healthcare market and includes deep dives into various areas of interest, along with a month-by-month summary of the key deals across the market.

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2025 Healthcare M&A Overview

Deal volumes

• Deal volumes were broadly flat through 2025, falling short of early-year expectations for a rebound

• Rather than pulling back entirely, acquirers and investors became more selective, with fewer processes progressing and timelines stretching as diligence standards tightened

Sub-sector activity

• Specialist care was the most active area of the market, with steady transaction volumes across residential care and supported living for individuals with learning disabilities, alongside growing activity in other specialist areas such as neuro-rehabilitation and dementia care

• Medical equipment activity spanned a broad range of manufacturers and distributors, particularly in essential and repeat-use categories including surgical instruments, orthotics, diagnostics and mobility products

• Digital health deal activity was concentrated in social care and healthcare management software, with more selective investment across EPR systems, remote monitoring, imaging and digital therapeutics

• Clinical services saw strong levels of activity across private hospitals and specialist “ologies”, driven by resilient private pay demand and continued outsourcing of services by the NHS

2026 outlook

• We expect 2026 deal volumes to remain broadly similar, with no single macroeconomic catalyst likely to materially shift activity

• Capital remains plentiful, but there is a clear shortage of high-quality, well-prepared healthcare businesses coming to market

• As a result, genuinely strong assets continue to command premium valuations, while average businesses struggle to attract competitive interest

Private Equity Activity

Private equity involvement

• Private equity was involved in approximately 50% of completed healthcare deals during 2025

• Healthcare remained a core focus for lower-mid-market private equity funds, despite broader macro uncertainty

• Platform investments became materially more selective, with significantly greater emphasis on commercial diligence and market validation upfront

Sub-sector focus

• Medical equipment saw several large transactions aimed at scale and operational leverage, including Rhone’s investment into Invacare / DHG and the buy-out of DCC Healthcare

• Care operators increasingly attracted asset-backed investors and REITs, with reduced appetite from traditional PE funds that were previously highly active in specialist care

• Clinical services investment focused on diversified models combining NHS and private pay exposure, with particular interest in scalable, ology-led platforms

What are private equity looking for?

• Clear, defensible market demand supported by strong commercial diligence

• Scalable platforms with sufficient organic growth to deliver returns without the requirement for acquisitions

• Diversified and resilient revenue streams, particularly where NHS and private pay coexist

• Low reliance on founders, with depth in the management team

• High-quality financial information and commercial data