NEW CANAAN, CT – April 17, 2025 – Healthcare merger and acquisition activity stabilized in the first quarter of 2025, with 480 deals announced, according to new acquisition data from LevinPro HC. Activity in the first quarter was virtually equal with the 482 deals announced in Q4:24. Year-over-year volume was close in volume as well, with Q1:25 activity dropping by 6% compared with transaction flow in the first quarter of 2024.
Activity in sectors such as Physician Medical Groups and eHealth drove much of the volume, with 109 and 77 deals, respectively. Volume in the Medical Outpatient Building market reached 49 transactions, reflecting the sustained demand for healthcare real estate properties. A number of sectors, however, struggled amid headwinds and uncertain market conditions. The Hospital market experienced one of its slowest quarters in more than a year, with only 11 transactions announced. There were a few large health system acquisitions in Europe and the Asia-Pacific region, but in the United States, there were two health system mergers, and five deals targeting short-term acute care facilities.
The MedTech and Life Science industries experienced gains in activity in the first quarter. The Biopharma sector reached 43 deals, just shy of the 44 from Q4:24, but eHealth and Medical Devices surged, hitting 77 deals (35% increase from Q4) and 23 deals (27% increase from Q4), respectively. Tailwinds in the eHealth sector, including legislative changes regarding telehealth and virtual care, helped drive up deal activity.
Deal value soared, hitting $66.06 billion in the first quarter of 2025, more than double the spending announced in Q4:24 and a marginal increase from $65.2 billion announced in Q1:24. Several large transactions in the Biopharma and Medical Devices space helped drive up deal value. Sycamore Partners stuck the largest deal of the first quarter, paying $9.9 billion in cash for Walgreens, the retail giant with a significant presence in the healthcare market. Inclusive of Walgreens’ long-term debt, the deal was valued at approximately $17.9 billion. Shareholders in the pharmacy chain were also promised to receive $3 in cash per share when Walgreens divests its healthcare subsidiary, VillageMD, in a future deal. The deal underscores the challenges Walgreens and other retailers like Walmart and CVS have faced trying to push into the healthcare provider space.
“Honestly, we thought deal volume was going to take a hit in the first quarter,” said Dylan Sammut, Editor of Healthcare at LevinPro HC. “The fact that quarter-over-quarter deal volume remained so stable is a testament to the resilience of the market. Still, there are some tough challenges ahead. The Trump Administration’s tariff policies could further increase expenses for providers of all sizes, and Republicans in Washington seemed poised to significantly cut Medicaid spending. These changes are still being ironed out, but nothing slows the healthcare M&A market like uncertainty.”
All quarterly results are published in The Health Care M&A Report, which is part of the Irving Levin Associates and LevinPro investment research source. 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.
