The Physician Medical Group (PMG) M&A market went through a recalibration in the first half of 2025, with lower-than-anticipated deal volume. According to preliminary data captured in the LevinPro HC database, between January 1, 2025, and June 30, 2025, there were 1,038 healthcare transactions, with 232 of them in the PMG sector. The PMG deal volume represents a 14% decline from the same period of 2024 when 270 deals were announced, and a 25% drop from the first six months of 2023 when 310 acquisitions were reported.
Disclosed spending totaled more than $857.2 million across three deals in the first half of the year. It’s common for prices to go undisclosed in the PMG sector, largely because many buyers are private equity firms that aren’t obligated to release financial details.
The deal with the largest price was McKesson Corporation’s acquisition of PRISM Vision Holdings, LLC for $857 million. McKesson acquired an 80% interest in PRISM, which is a provider of general ophthalmology and retina management services.
To learn more about the market’s conditions and what investors should keep an eye on for the coming months, the Levin HC team spoke with John Tiedmann, Managing Director of Physician Growth Partners.
According to Tiedmann, deal volume is up from last year, and there are a plethora of deals under LOI and in the coming pipeline (or even undisclosed/private transactions). This speaks to the idea that deals are taking longer to complete and may not be factored into all statistics, yet.
“There are also several buyers in every specialty, more than enough to create a healthy process and some healthy competition,” he said. “We’re seeing good bidding across the specialties.”
Dental was the most active specialty with 121 transactions. There were an additional five dental service organization (DSO) acquisitions. Combined, the two dental-focused specialties account for nearly 50% of all PMG deals transactions of the first six months.
The high volume of dental activity was not a shock to Tiedmann.
“Dental has been a juggernaut; it’s been around for a while and because it’s so fragmented it seems to have an endless runway,” he said. “There are more platforms in dental than any other specialty. There’s also a huge quantity of single or two-provider practices that are experiencing challenges that a larger platform can help with and simplify their administrative burdens.”
The dental-centric specialties remain a prominent driver of activity in the PMG space, as explained by the factors outlined by Tiedmann. The first six months of 2024 starkly illustrate this dominance: in the first six months of 2024, there were a combined 148 dental/DSO transactions, representing nearly 55% of the PMG deals in the period. While there were less dental transactions in 2025 than there were in 2024, the specialties are still incredibly active.
Other sectors that showed prominence in the PMG space include dermatology and eye care. In the first six months of 2024, there were 15 dermatology transactions, a 67% increase of 2024 when nine were reported. Deal volume in the eye care space remained consistent year-over-year, with 13 deals in the first half of 2024 compared to 14 in the first half of 2025.
“There’s a high number of strategic platforms and buyers that have done well and continue to drive M&A activity,” said Tiedmann on why specialties like dermatology and eye care have high deal volume.
In the dermatology and eye care sectors, platforms like Leonard Green & Partners’ Epiphany Dermatology (five deals) and Dermatology Partners (two deals), along with LRR Partners’ Eye Health America (three deals) and Chicago Pacific Founders’ SightMD (two deals), have emerged as the most active buyers.
Orthopedics is another specialty that’s interesting to examine because it tends to fluctuate over time. The first half of 2025 was an average year for the orthopaedic space, with 14 reported transactions. In the first six months of 2024, there were 11 orthopaedic transactions and in the first half of 2023, there were 20.
“There’s continued interest because orthopedics is one of those specialties where the capital outlay can be significant, whether it’s an MRI, whether it’s a surgery center,” said Tiedmann. “For lack of a better term, there are lots of ways to spend money in the specialty so it’s a natural specialty for a capital partner to come in.”
While specific sectors continued to demonstrate substantial transaction volume, others saw limited momentum. As one of the sectors that did not rise in deal volume, the cardiology sector recorded seven deals in the first half of 2024 and matched that exact number in the first half of 2025.
Tiedmann, along with other industry experts the Levin team had spoken to over the past few months, believed that cardiology would have been more active.
“The problem is a lot of the bigger groups got gobbled up in the first couple of years of the cardiology flurry,” he said. “Investors are left with small groups trying to decide what the right path forward is. I think that really the slowdown in activity is more the supply of sizable groups to go after.”
Tiedmann noted that approximately 70–80% of cardiologists are employed by health systems, underscoring the limited number of independent cardiology groups in the market, a factor that may be contributing to the specialty’s slowdown.
Going forward, while the market has been steady, some regulatory concerns could present difficulties with transactions.
“There’s increasing regulation and proposed legislation around private equity investments in the provision of healthcare and whether that should be something states review. There are also some things changing in certain states around non-compete laws, which are shifting a key paradigm in how investors protect their investment,” said Tiedmann. “In both cases, you’re changing the risk/reward profile from an investor’s perspective.”
Tiedmann did note that there is no reason to suspect this will hinder or stop transaction activity entirely. However, he believes that it will cause investors to take a step back and understand what the regulations and legislation mean for how (and where) transactions are conducted.
