Health & Social Care continues to underpin solid healthcare M&A

UK healthcare saw a solid, if unspectacular, year of dealmaking in 2025, with activity staying strong despite a more challenging M&A environment. Activity in the sector continued to be underpinned by M&A in Health and Social Care (H&SC), which accounted for close to half of the deal volume in 2025.

According to a new report from Heligan Group, Reflecting on 2025: UK Healthcare M&A, there were a total of 280 announced or completed transactions in the sector during 2025, broadly flat compared to the previous year.

Describing 2025 as “a year of resilience rather than expansion for UK healthcare M&A”, Ramesh Jassal, partner, Corporate Finance, Healthcare at Heligan Group, said that this was nonetheless significant “given the broader slowdown across UK dealmaking.”

According to Jassal, investors were “cautious but committed, with capital flowing towards high-quality assets offering scale, asset backing and operational resilience.”

H&SC accounted for 47 per cent of the total deal volume in the sector during 2025, with Heligan Group citing "continued consolidation in care homes, pharmacies and community-based providers, reflecting demographic pressures, capacity constraints and investor appetite for asset-backed, cash-generative models".

Jassal stated: "Healthcare continues to stand apart from other sectors, supported by long-term demographic tailwinds, predictable demand and strong international interest. While private equity has remained selective, strategic buyers were increasingly active, particularly in bolt-on acquisitions and consolidation strategies."

Pharma and life sciences made up 22 per cent of total volume, followed by medical equipment and devices (17 per cent) and healthcare IT (15 per cent).

The report highlighted how, despite deal volume remaining relatively steady, activity in 2025 was “increasingly concentrated in high-quality assets”, with premium valuations for businesses in areas such as diagnostics, digital health and biopharma. A number of large-scale transactions were seen in elderly care, meanwhile, including several landmark takeovers by US-based real estate investment trusts (REITs).

Dealmaking in pharma and life sciences was described as “resilient but selective”, with biopharma accounting for 35 per cent of deals within the sub-sector as large pharmaceutical firms sought “access to next-generation therapeutic platforms, including cell and gene therapies, advanced biologics and AI-enabled drug discovery".

Heightened regulatory caution in the US and Europe, however, led to “more "disciplined capital deployment, particularly in manufacturing-heavy and vaccine-exposed assets".

While M&A in medical equipment and devices remained broadly flat, diagnostics emerged as a key growth area. The report found strong investor interest in areas such as AI-enabled diagnostic platforms, imaging and testing, boosted by “NHS backlogs, rising chronic disease prevalence and the continued rollout of Community Diagnostic Centres".

Strategic buyers dominated activity last year, accounting for 83 per cent of the year’s total, amid continuing emphasis on “synergies, integration and long-term positioning”. Private equity buyers, meanwhile, were active, but largely focused on bolt-on deals rather than new platform investments.

Internal UK deals made up 57 per cent of the total, while close to a quarter (24 per cent) were inbound transactions and around a fifth (19 per cent) were outbound. As in many other sectors, the US remained the primary international market, both in terms of inbound and outbound investment.

Jassal commented: "UK buyers showed a clear preference for domestic opportunities in 2025, with internal deal volumes increasing as global uncertainty persisted. At the same time, the US remains the UK's most important strategic partner, and we expect this dynamic to continue into 2026.”

"Looking ahead, we anticipate that UK healthcare M&A will remain selective but robust. Falling inflation, easing interest rates and sustained public investment in NHS digital infrastructure and life sciences R&D provide a supportive backdrop, while cost pressures and regulatory complexity are expected to accelerate consolidation across the sector."

Find out more about health and social care dealmaking in our in-depth analysis of M&A in the community care space

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