Private Equity Investments in Healthcare Decline in Q1:25, According to Data from LevinPro HC

NEW CANAAN, Conn., April 16, 2025 /PRNewswire/ -- In the first quarter of 2025, private equity firms and their sponsored companies ("PE Buyers," collectively) announced 166 transactions in the healthcare M&A market, or approximately 35% of all the 480 announced healthcare deals, according to data captured in the LevinPro HC platform.

This represents a small decrease in M&A volume from the 170 PE transactions announced in the fourth quarter of 2024, but a 7% increase from the 155 deals reported in Q1:24.

In Q1:25, disclosed spending totaled more than $29.98 billion across 11 deals with a PE Buyer. The transaction with the largest purchase price was Sycamore Partners' acquisition of Walgreens Boots Alliance, Inc. (Walgreens) for $17.9 billion, inclusive of Walgreens' long-term debt. Sycamore Partners, based in New York, has approximately $10 billion in aggregate committed capital. Walgreens' sales totaled $147.7 billion in 2024, and it recorded an operating loss of $14.1 billion.

Physician Medical Groups (PMG) drew the highest interest from PE Buyers, with 66 deal announcements, accounting for nearly 40% of all PE activity in the healthcare space. However, activity from PE Buyers in Q1:25 is virtually on par with deals in Q4:24, when they announced 67 deals in the PMG market.

In the PMG sector, PE Buyers targeted dental practices in 50% of the acquisitions, with 33 transactions. This is more than the 29 announced in Q4:24, but 25% less than the 44 PE-backed physician deals reported in Q1:24.

PE Buyers also turned their attention toward the digital health market, announcing 25 transactions in Q1:25, or 15% of all PE activity in the quarter. This is an increase from Q1:24 when PE Buyers reported 20 transactions. Revenue cycle management was the most active eHealth specialty with eight acquisitions.

Thoma Bravo and its portfolio companies were the most active buyers in the digital health space in the first quarter. Through Cority, a leader in occupational health, it purchased Meddbase, a medical practice management software organization; another portfolio company, Bluesight, acquired Protenus, a provider of a healthcare compliance analytics platform. 

In Q1:25, there were 22 PE-backed Other Services transactions, 16 Home Health & Hospice deals, 11 Behavioral Health Care acquisitions and eight Laboratories, MRI and Dialysis deals.

The most active PE-backed buyer was MB2 Dental Solutions, a portfolio company of Warburg Pincus and Charlesbank Capital Partners, with seven deals in Q1:25. This marks a 65% decline from Q1:24 when MB2 Dental announced 20 transactions. The second most active PE-backed group was Heartland Dental, backed by KKR & Co. Inc., which reported five transactions. 

Some private equity firms announced investments in new companies throughout the first quarter, such as Bain Capital, Elliott Bay Capital and New Mountain Capital.

"Although private equity-backed transactions declined in a quarter-over-quarter analysis, private equity continues to be a major player in the healthcare M&A market," said Editorial Analyst Kate Humphrey. "Despite this decrease, investors and advisors have remained optimistic that private equity will overcome the economic challenges facing the market and will announce more transactions in the following quarters."

All quarterly results are published in The Health Care M&A Report, which is part of LevinPro HC, a research intelligence platform published by Irving Levin Associates, LLC. For information, or to order the reports, call 800-248-1668. Irving Levin Associates is celebrating more than 70 years of delivering exclusive M&A intelligence to its sophisticated audience of seniors housing and healthcare investors. The company was established in 1948 and has offices in New Canaan, Connecticut and North Bethesda, Maryland. The company publishes research reports and newsletters and maintains databases on the healthcare and senior housing M&A markets. 

SOURCE LevinPro HC