Healthcare M&A outlook: A promising landscape for 2025 | Viewpoint

Healthcare mergers and acquisitions (M&A) are potentially set to gain momentum in 2025, driven by technological innovation, strategic consolidation, and a potential business-friendly regulatory environment in the US.

Innovation, strategic thinking, and a favorable regulatory environment should drive more deals, Mark Williams of Datasite writes.

Healthcare M&A resilient in 2024

Healthcare organizations have been shifting their focus from aggressive expansion to strategic consolidation, emphasizing core platforms, operational capacity, and geographic reach. The transition reflects a maturing healthcare market.

Yet, the healthcare M&A has demonstrated resilience despite headwinds. For the 12 months through November, global healthcare and life sciences sell-side deals facilitated by Datasite, which annually supports close to 15,000 new deals, increased 4% year-over-year, while buy-side deals rose 10%. This early-stage activity signals growing investor interest in acquiring high-quality assets and expanding capabilities, offering a promising glimpse of what lies ahead.

With the expectation that a new U.S. administration will support a business-friendly agenda, including reduced red tape, lighter antitrust scrutiny, and corporate-friendly tax policies, the industry could see more M&A in 2025. In fact, in the two weeks following the presidential election, healthcare deal kickoffs on Datasite soared 51% year-over-year. Post-election regulatory clarity is likely spurring some of this activity.

Innovation, PE resurgence to drive opportunities in 2025

Other key areas driving activity include technological Innovation and private equity resurgence.

Organizations are increasingly acquiring companies that offer cutting-edge solutions to enhance patient care, improve operational efficiencies, and reduce costs. Telemedicine and digital therapeutics continue to gain traction, providing greater access to care while streamlining operations.

Artificial intelligence (AI) is another transformative force, with the healthcare AI market projected to grow from $15 billion in 2022 to $188 billion by 2030.

AI-driven solutions are being used to improve diagnostics, personalize treatment plans, and optimize care workflows. For example, AI can analyze vast patient datasets to detect diseases earlier, recommend tailored treatment protocols, and predict outcomes with greater accuracy. Companies seeking to capitalize on these advancements are expected to pursue M&A opportunities to acquire AI capabilities.

Private equity firms are also re-entering the market with renewed focus, supported by substantial dry powder and rationalized valuations. These firms are targeting assets that align with their growth strategies, often prioritizing scalability and operational efficiency. The divestment of non-core portfolios by larger organizations creates additional opportunities for PE investment.

Challenges and complexities

Despite the optimistic outlook, challenges persist. Regulatory scrutiny and due diligence remain critical hurdles.

The integration of AI in M&A processes, while promising, faces obstacles such as data security concerns, compliance requirements, and change management issues. In fact, most global dealmakers cite data security as a primary concern and want increased AI regulation. These factors highlight the need for a balanced approach that combines technological innovation with human expertise.

A balanced approach to success

To thrive in this evolving landscape, businesses must adopt proactive strategies and leverage technology to enhance efficiency and mitigate risks.

AI and advanced analytics can streamline the M&A lifecycle, from identifying targets to executing transactions. However, human interaction remains vital for building trust and closing deals. A blended approach that integrates technological tools with traditional best practices will be key to achieving successful outcomes.

Healthcare M&A in 2025 offers a promising landscape, driven by innovation, strategic consolidation, and a favorable regulatory environment.

Organizations that embrace adaptability and prioritize strategic focus will be best positioned to seize opportunities and drive transformative growth. By balancing innovation with resilience, the healthcare sector can continue to deliver value and improve outcomes for patients, providers, and investors alike.

Mark Williams is global chief revenue officer, Datasite Enterprise.