Resilient deal volumes in 2024 across healthcare sub-sectors set the scene for M&A rebound
According to research from Heligan Group, M&A deals rose by 20% across the healthcare sector in 2024, rising from 227 to 282. This was dominated by health and social care, with 121 deals at 43% of the deal sector volume, followed by pharma and life sciences at 77 deals, medical equipment and devices at 49 and healthcare IT at 35. Q3 saw the most deals in 2024, with 96 finalised. 22% of deals in 2024 were inbound, 45% were internal, and 33% were outbound, with the majority being trade to buyer at 77%.
Ramesh Jassal, partner at Heligan Group, said, “Healthcare M&A surged in 2024, with 80% of deals made by trade buyers, while financial sponsors remained cautious. 2025 looks promising, with elections behind us, expected interest rate cuts, and easing inflation. However, geopolitical tensions and policy shifts may still impact global trade and investment. While there was a 30% decline in total volumes between 2022 and 2023, 2024 witnessed a strong rebound with a 20% increase. Health & social care deals dominated the 2024 volume rebound, whilst durable equipment, pharma and the proliferation of AI-related deals underpinned growth across subsectors.”
Trade buyers dominated the landscape in 2024, accounting for 77% of deals, while private equity has remained an active participant. H&SC deals constitute most internal deals, as they involve tangible in-person services and real estate. Outbound deal flows have increased, primarily to the US and Europe, indicating UK companies are seeking international targets to remain competitive. The US remains the dominant global driver in the market, both in targets and buyers.
“Investors are bracing for turbulence in the healthcare sector due to potential changes in spending and regulation under a Labour government. Positively, this includes Labour’s pledge to reduce NHS waiting times to the 18-week target. Furthermore, proliferating innovation has led to greater regulation, with the Medicines and Healthcare Products Regulatory Agency (MHRA) implementing a streamlined process for the approval of AI-based medical devices. The ageing UK population has continued to drive M&A activity towards elderly care, a favourable sector amongst political and economic uncertainty. In light of this, the UK’s healthcare sector is in a far better position and primed for an M&A take-off in 2025. However, outbound deals will face headwinds related to US tariffs and the evolving UK-US relationship, though there remains an exciting pipeline of deals ahead,” concluded Jassal.