Healthcare & Life Sciences M&A: A Year in Review & Future 2025 Outlook
In 2024, the Healthcare and Life Sciences (HLS) M&A market demonstrated resilience, driven by favourable market dynamics, macroeconomic support, and strong investment interest from corporates and private equity firms.
Key transaction focuses included enhancing capabilities, diversifying end-markets, and adopting new technologies, with healthcare companies targeting disruptive tech and innovative products.
Key drivers of the HLS M&A market:
- Market Consolidation: Companies pursued strategic consolidation to enhance efficiency and gain market share in the fragmented sub-sectors.
- Macroeconomic & Sector Tailwinds: Factors like aging population and positive recovery in the GDP growth have bolstered demand for healthcare services, attracting both strategic and financial investors.
- Technological Advancements: Digital health platforms, AI and machine learning are transforming the healthcare sector, prompting acquisition of tech-enabled offerings.
- Valuation Trends: High-quality healthcare assets attracted strong interest and valuations, with premiums for ESG-compliant assets.
Sector Outlook 2025:
- Economic Growth & Stability: The HLS market is set for dynamic growth in 2025, driven by global economic improvements and political stability in the UK, US, and Europe, creating a favourable environment for business development and consolidations.
- Government Policy & Taxation Changes: Updates to capital gains tax, national insurance, and the national living wage, are expected to influence M&A activity, growth strategy and investor appetite.
- Increased Healthcare Funding: The planned spending boost by the Department of Health & Social Care will likely benefit the private sector, given historical trend of increased outsourcing opportunities.
- Digitisation in Healthcare: Diagnosis and care delivery are increasingly shifting online or into at-home settings, creating demand for innovative platforms.
- Strategic M&A Drivers: The buy-and-build strategy remains a dominant trend, as PE-backed platforms strengthen their competitive edge. Also, the carve-out market is gaining momentum, with large corporates divesting non-core businesses, creating significant opportunities for investors.
To learn more about the key M&A trends taking shape in the HLS space, read our latest paper.
If you would like to know more about the HLS M&A landscape after reading this paper, or have any other questions on the wider healthcare space, please do get in touch with Al-Munther Sultan. We would be delighted to discuss this report with you, including any implications these current and longer-term market themes may have on your business and overall shareholder objectives.
