As AI-powered technologies continue to shape the healthcare industry, the market value is expected to skyrocket. In turn, this has opened more opportunities for private equity firms to get involved in healthcare, especially in health technology...
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Heartland Dental's Shopping Spree
The KKR-backed company has announced five acquisitions this year, all in different corners of the country...
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Clearlake Capital Buys Out ModMed
ModMed announced that it has received a significant majority growth investment from Clearlake Capital Group, valued at $5.3 billion....
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Table of Contents
Lead Story Page 1
Behind the Deal Series ........................ Page 4 Top Stories .............................................. Page 8 Top Deals Page 14 Monthly Chart Page 15
A Slow Start for the 2025 Healthcare M&A Market
Month-to-Month Volume Slid Again in March
The 2025 healthcare M&A market is off to a slow start, based on preliminary results for the first three months. Continuing to dip from the 223 announced in January 2025, there have been 126 transactions reported, to date, in March, according to data captured in the LevinPro HC database. This is on par with the 124 transactions reported in February 2025. However, March represents a 16% drop from the 150 in March 2024.
Additionally, March brings Q1:25’s total deal volume to 482 transactions, representing a 6% decline from 511 transactions announced during Q1:24.
The most active sector was Physician Medical Groups (PMG) with 36 recorded deals for March. It is not surprising that PMG had the highest deal volume, as investors often pay close attention to the sector
Hospital M&A Stalls in Q1:25 Headwinds take a toll on the industry
News and results from the Hospital M&A market have been mixed in 2025 so far. Deal activity has been slow, with 11 transactions on the books at the time of writing, according to data captured in the LevinPro HC platform. Those numbers trail what we saw in Q1:24, which had 15 deal announcements.
There are some likely explanations for this slowdown. Health systems and hospitals are undoubtedly lobbying and fighting the suspected Medicaid cuts from the Republican legislature and Trump Administration. Speaker of the House Mike Johnson and the President have said Medicaid is safe, but to reach their desired cuts and budget, there’s no way around the numbers.
due to the fragmented nature of the market. The deal volume in March is slightly more than the 28 PMG deals reported the previous month. Yet, it is 16% less than the 43 announced in March 2024. In total, 105 PMG deals were announced throughout the first quarter.
Within the PMG space, the subsector with the most deals was dental, totaling 61% of the PMG deals (22 transactions). This represents an increase from February, which saw 13 acquisitions. Other PMG specialties with notable deal activity were dermatology and eye care, with three deals each.
MB2 Dental Partners reported the most deals with three transactions, expanding its presence by three practices in seven physicians. MB2 Dental Solutions is a portfolio company of private equity firm Charlesbank Capital Partners and Warburg Pincus and was founded in 2007. The practices it purchased in March are based in Bloomington, Illinois, St. Louis, Missouri and Syosset,
on Long Island in New York.
Other Services was another active sector with 27 transactions, a 13% drop from the 31 in February. The activity in February is a continued decline of deal activity for the sector as there were 50 Other Services transactions announced in January. However, it is essentially the same as March 2024 when there were 26 deals. It should be noted that Other Services was the busiest sector in Q1:25 with 111 acquisitions.
In the Other Services space, medical outpatient buildings (MOBs) were the most active vertical, totaling 10 transactions in March.
The largest deal in the MOB space was the acquisition of a four-building portfolio in Gilbert, Arizona by a joint venture between Woodside Health, LLC and Heitman LLC. The buildings totaled 39,000 square feet, and according to official press release, this was the eighth property the joint venture has purchased in the last five months.
This publication is not a complete analysis of every material fact regarding any company, industry or security. Opinions expressed are subject to change without notice. Statements of fact have been obtained from sources considered reliable but no representation is made as to their completeness or accuracy.
Woodside Health is a private equity firm that invests in healthcare real estate. Since 2008, the firm has acquired more than 3 million square feet of healthcare real estate and closed more than $1 billion of transactions.
Founded in 1966, Heitman is a global real estate investment management firm with approximately $53 billion in assets under management. The firm also recapitalized a Texas and North Carolina-based portfolio alongside Global Medical REIT. Newmark announced the recapitalization of the portfolio, which comprises 115,604 square feet.
There were 19 eHealth transactions, nine in the Biotechnology and Pharmaceuticals market and six Laboratories, MRI, and Dialysis deals.
Private equity (PE) firms and their portfolio companies account for approximately 33% (42 deals) of the completed transactions in March, the most active investor type of the month. This aligns with previous months, as private uity has consistently been among the leading investor Continued on LevinPro HC
Behind The Deal Series
Physician Growth Partners Advises on Behavioral Health Care Merger
Physician Growth Partners (PGP) announced that it advised on the acquisition of Oasis Behavioral Health Urgent Care and GBCC Behavioral Health by Orchard Mental Health Group. The deal was announced in February 2025.
PGP is a sell-side healthcare investment banking firm dedicated to representing independent physician practices in transactions with private equity. As part of the deal, GBCC acquired Oasis, and then Orchard acquired the combined entity. PGP advised GBCC in the deal.
GBCC Behavioral Health is a comprehensive mental health center that has been providing services since 1996. The company’s provider network offers psychological evaluations, individual, family, as well as couples counseling and psychiatric medication management. Many services are also available via telehealth.
Oasis Behavioral Health Urgent Care is a mental health walk-in center for people in urgent need of care. Its services include brief counseling, safety screenings and referrals to other resources. The company, founded in 2005, operates one location in Annapolis, Maryland. It also offers group and individual services.
Formerly known as Quince Orchard Psychotherapy, Orchard Mental Health Group offers in-person and virtual therapy, medication management, diagnostics and psychiatric services. Founded in 2015 and based in Rockville, Maryland, the company partnered with the private equity firm The Graham Group in May 2023.
After adding the two practices to its footprint, GBCC and Oasis operate six locations with more than 80 clinicians. All three entities operate and are located throughout the greater Washington D.C. MSA. Financial terms of the deal were not disclosed.
The LevinPro HC team spoke with Sali Asani, Vice President at PGP, about PGP’s role in the transaction and the broader trends shaping the Behavioral Health Care (BHC) M&A market.
In our conversation, Asani emphasized why the leadership team of GBCC Behavioral Health felt that Oasis was a right fit.
“Founders Laura Steensen and Juliet Goozh built something really special over the last couple of decades and were looking for a like-minded partner that would help them continue to expand upon their ability to deliver premium care to their patients and maintain the company culture and values that have been a cornerstone for their provider team and support staff,” said Asani.
Asani went on to discuss how this transaction builds upon the idea that BHC is drawing a greater interest from investors than before and will likely see an increase in deal volume over the coming months and years.
“The industry remains fragmented and thus we’re bullish on the space as a whole, especially for assets who have a proven track record and can drive market density and provider base accretion in a competitive hiring environment,” he said.
According to data captured in the LevinPro HC database, at the time of writing, there have been 21 BHC transactions in 2025, five of them in the counseling and psychiatric care specialty. Throughout all of 2024, there were 70 BHC acquisitions and 18 counseling and psychiatric care deals. If 2025 continues on the streak that it has been going on, it will surpass 2024 in terms of BHC deal activity. This (hopefully increased) activity backs up the notion that investors have been optimistic about the BHC market and will likely see continued interest going forward.
He even noted improving access to behavioral health has been a focus for many investors for some time due to the increasing prevalence of mental health needs.
“Investors continue to ride the secular tailwinds from rising demand for behavioral health care services in the wake of COVID-19,” he said. “Nevertheless, as consolidation continues to increase, the groups that will set themselves apart will be the ones that appropriately balance provider, service, care delivery, and payor mix whilst excelling in a competitive hiring/retention environment.”
Agentis Longevity Expands Access to LifeChanging Longevity Care With Mantality Acquisition
Agentis Longevity, a Shore Capital Partners-backed healthcare platform, announced its acquisition of Mantality, a provider of hormone replacement therapy and medical weight loss services. The deal, which closed recently, was facilitated by Agenda Health, an Austin, Texas-based M&A advisory firm focused on healthcare.
across the Midwest, including Missouri, Iowa, Wisconsin, Nebraska, Michigan, Ohio and Pennsylvania. Agentis Longevity, based in Florida, is creating a network of accessible, high-quality longevity practices.
Longevity care focuses on extending healthy lifespans through personalized medical interventions, such as hormone optimization and weight management. It aims to enhance quality of life by addressing age-related decline with evidence-based treatments. Historical deal data for longevity care is light since it’s a new and rapidly growing field gaining significance as a specialized approach to aging.
We spoke with Jimmy St Louis, CEO of Agentis Longevity, and Alex Veach, Director of Transaction Services at Agenda Health, to explore what drove this deal and its place in the specialized healthcare market.
Mantality caught Agentis Longevity’s eye as a leader in patient-first testosterone replacement therapy (TRT), a treatment increasingly sought after as upwards
of 5 million men in the United States deal with hypogonadism, per the Cleveland Clinic. St Louis saw the Mantality model as a fit for his vision.
“Agentis Longevity is a healthcare platform focused on setting the standard of care for and democratizing access to longevity-based healthcare through our partnerships with best-in-class physicians, partners, operators and other healthcare experts,” said St Louis. “Our partnership with Shore Capital will accelerate achieving our objective to first acquire best-in-class longevity practices and then to share best practices to create an accessible and affordable solution for patients seeking to live longer, healthier, more fulfilling lives.”
Agenda Health kicked off the process after targeting Mantality for its sector potential. The firm acted as the exclusive sell-side advisor to Mantality Health in the transaction.
“Agenda facilitated a competitive market process for Mantality that produced several bids from interested parties,” said Veach. “From there, it became clear that Shore Capital had the strongest alignment with Mantality ownership. There were no significant challenges over the course of diligence; both parties worked together smoothly towards closing.”
Agentis Longevity plans to leverage Shore’s deep healthcare playbook to build on Mantality’s strengths while scaling its reach. St Louis aims to refine care standards with this foothold.
“Mantality practices medicine in a manner that puts the patients first, with a focus on outcomes through measuring data,” said St Louis. “They’ve got a great patient services delivery model with frequent hormone panels and testing, and the interactions that the providers have directly with the patients, in our opinion, is best in class.”
Kevin Meuret, Founder of Mantality and the seller in the transaction, echoed this focus on patient care while highlighting the deal’s broader impact.
“Agentis Longevity’s acquisition of Mantality transforms
us from a regional leader in TRT treatment into broader spectrum men’s health, leveraging a streamlined growth playbook to expand our reach efficiently while prioritizing exceptional patient care,” Meuret said. “With access to cutting-edge treatments and robust operational systems, we can now offer innovative, high-quality services, empowering men to live healthier, more vibrant lives. This was the best move we could have made for our clients and our company.”
The deal progressed smoothly with no major obstacles. Both sides shared a clear focus. According to Veach, the key factors that made the deal successful were strong cultural alignment between the two parties and strong tailwinds in the sector.
Agentis Longevity’s move aligns with growing interest in longevity-focused healthcare. Demand for hormone therapy and weight loss services is climbing, fueling M&A in specialized care. The global HRT market hit $37.4 billion in 2024, per Precedence Research, with a projected 6% CAGR through 2034 as aging populations and chronic conditions drive need. Private equity sees an opportunity in this space, with Veach highlighting the “surge in bids” for Mantality as proof of the sector’s allure.
“Agenda has been very excited about the broader Longevity sector for a long time now, which prompted our initial outreach to Mantality ownership,” said Veach. “With the increasing demand across the country for these services that will support continued growth in the sector, we see a tremendous opportunity for private equity to build compelling platforms. The results of our process for Mantality proved that thesis – Agenda looks forward to continuing to partner with owners in health and wellness and longevity services.”
Broader insurance acceptance and growing patient awareness are accelerating this trend. With the acquisition of Mantality, St Louis sees an opportunity to democratize access, challenging the perception that longevity care is a niche luxury reserved for the elite.
“Typically in longevity healthcare, people believe it to be an expensive treatment offering only for the wealthy,”
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asset as St Louis plans a national expansion. The deal hands Agentis a network of providers and a window into patient trends.
“Our first move with Mantality is to create consistent protocols across the board to extend services,” said St Louis. “They have a large number of great providers, thousands of very happy patients and lots of great data, so this deal allows us to gain a deep understanding of what motivates the patients, what they’re looking for and what their demographics are.”
Mantality’s track record in building out its clinics with a
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steady, measured pace stood out to Agentis. St Louis aims to target more practices with this kind of edge, building a network that sticks to real outcomes. The plan is to turn those lessons into a working model.
“This is the first of many partnerships that allows us to really establish what the standard of care should look like, and what quality of care should look like within this industry,” said St Louis. “I believe that the industry
Mantality’s provider network gives Agentis a head start in scaling care delivery. St Louis plans to use its patient base to drive expansion and raise awareness. He sees Mantality’s Midwest footprint as a testing ground for broader reach.
“We’re very proud to have partnered with Mantality, and this partnership has given us the confidence that we can work to continue to set the standard of care and educate a marketplace all over the country that may not have had access to this before,” said St Louis.
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Top Stories of March 2025
Navigating Behavioral Health Trends and Valuations: M&A Healthcare Advisors’ 2025 Outlook
Activity in the Behavioral Health Care (BHC) mergers and acquisitions (M&A) market is ramping up after a few slow years. As treatment providers and investors navigate this dealmaking landscape, the sector is poised for significant activity in 2025 and beyond. To unpack these trends, the LevinPro HC team spoke with Andre Ulloa, Founder and Managing Director at M&A Healthcare Advisors, who shared insights into the forces shaping the market and where it’s headed next.
M&A Healthcare Advisors has carved out a niche in the BHC M&A space by specializing in navigating complex, lower-middle market deals. This focus helps the firm tackle the real hurdles in the behavioral health industry. That expertise is increasingly vital as the sector begins to see an uptick after a few slow years, fueled by trends now coming into play.
Ulloa commented on technology’s major role in this uptick, reshaping how treatment centers operate and draw interest. Beyond flashy tools, artificial intelligence and software are zeroing in on the sector’s Achilles’ heel—low success rates—a challenge he described as a stubborn barrier begging for innovation after years of stagnation.
“So much of behavioral health M&A is tech-driven. Artificial intelligence and software at treatment centers are creating efficiencies and driving value with evidence-based treatment, boosting success rates that are quite low,” said Ulloa.
Telehealth is another critical piece, extending care delivery beyond traditional settings. Ulloa emphasized its role in sustaining patient connections and supporting families, particularly in high-demand areas like autism care, which is seeing heightened M&A activity.
“Telehealth’s a big deal across behavioral health now. It’s a great tool keeping detox alumni connected and guiding families with autism patients at home,” Ulloa explained.
Autism M&A, centered on applied behavior analysis (ABA) therapy, is a significant driver of activity in the BHC market. In 2024, autism ranked as the third most active BHC specialty, trailing only counseling/psychiatric care and substance use disorder (SUD) treatment specialties. Autism M&A has been on the rise recently, according to transaction data. Autism deals increased from 11 announced in 2023 to 13 in 2024, a slight uptick. In the first two months of 2025 there have been five autism-related deals, compared to none announced in the first two months of 2024—a pace suggesting it could overtake higher-ranked BHC specialties if trends hold.
“Autism M&A is booming because patient populations are growing. Five years ago, we had massive consolidation, and now mature platforms are bolting on acquisitions,” said Ulloa.
Deal execution remains a critical hurdle. Ulloa noted that buyers are dissecting financials with forensic intensity after spotty post-COVID growth left some platforms overvalued. Sellers who can’t back up their numbers or who cling to 2021-era multiples risk derailing talks, especially with private equity favoring proven cash flows over speculative bets.
“Our best ABA deals fly through when buyers trust the sellers’ numbers and sellers keep realistic about today’s market,” Ulloa noted.
Persistent high borrowing costs, around 5-6% for acquisition financing, compound this scrutiny. The market’s reset from peak valuations since 2021, when ABA deals occasionally hit double digits, underscores that credibility is a deal’s lifeline.
“Trust is the backbone of the deals we do,” said Ulloa.
That trust directly shapes valuations, as buyers lean on reliable metrics to navigate the shifting BHC market.
Persistent reimbursement shortfalls, notably in mental health where payout rates trail commercial benchmarks by up to 20%, coupled with regulatory flux from evolving Medicaid policies, continue to exert significant pressure on deal pricing as of Q1 2025.
“ABA valuations sit at 6X to 8X, and easily assignable commercial contracts can provide an edge on multiple. For treatment SUD, out-of-network gets 4X to 6X as bolt-ons, while in-network SUD and particularly mental health hits above 6 times or more if it’s humming,” Ulloa explained.
With 17 BHC deals announced already in 2025, demand for mental health platforms is heating up. Private equity is circling platforms that can bridge gaps in eating disorder and sober living care, areas where reimbursement lags but patient need is acute. For the first two months of this year, private equity firms and/or a portfolio company were involved in 10 deals, or 59% of the BHC deals announced.
“Mental health M&A will take off in 2025 with eating disorders, flexible treatments and sober living after detox, expanding the care continuum beyond substance abuse,” Ulloa said.
SUD and mental health deals are accelerating too, even among out-of-network providers, a pivot Ulloa finds striking given private equity’s past aversion. For example, KKR, a firm that historically sidestepped outof-network SUD assets due to volatile cash flows and favored stable in-network plays like its 2019 BrightSpring acquisition, has recently embraced hybrid models with the formation of Geode Health, which includes out-ofnetwork services by 2025. M&A Healthcare Advisors’ pipeline, which Ulloa described as a mix of deals poised to close if Medicaid efficiencies materialize, suggests this trend could pick up with policy support under the current administration.
“A year from now, I see substance use disorder and mental health centers, even those Out-of-Network, taking off. We are concentrated in a number of these deals, at present,” Ulloa predicted.
The BHC M&A market is at a tipping point. If technology and policy align as Ulloa expects, 2025 could redefine the sector’s scale, pulling in bigger players and testing whether today’s disciplined deals can sustain tomorrow’s growth ambitions.
The Cigna Group Completes Sale of Medicare Businesses to HCSC
More than a year after the original deal announcement, The Cigna Group announced on March 19 the successful completion of the sale of its Medicare assets to Health Care Service Corporation (HCSC). The assets include Cigna’s Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D and CareAllies businesses. The divestment of these assets streamlines Cigna's portfolio and enables it to drive further innovation to support customers.
HCSC is the United States' largest customer-owned health insurer with nearly 17.5 million members in its health plans in Illinois, Montana, New Mexico, Oklahoma and Texas.
Proceeds from the sale will be used in alignment with The Cigna Group's capital deployment priorities, with the majority expected to be allocated to share repurchases. The original deal announcement from 2024 disclosed a total transaction value of approximately $3.7 billion.
The Cigna Group will continue to provide pharmacy benefit services and other solutions to the Medicare businesses through its health services company Evernorth Health Services as part of services agreements with HCSC for an agreed period postclosing.
Walgreens Has Finally Been Sold
After months of rumors and speculation, Walgreens has finally announced it is being sold for nearly $10 billion in cash, or approximately $17 billion if we include debt. Although many already know Walgreens as a retail giant, it has been making a significant push into the healthcare market for the past years, but that plan has backfired. According to its annual report for fiscal year
2024, the company reported an operating loss of $14.1 billion (yes, billion), largely due to the loss in value of VillageMD, its primary care subsidiary and the principal vehicle for its healthcare initiative.
Walgreens’ healthcare strategy was on display in the M&A market; in addition to the company’s $5.2 billion investment in VillageMD in 2021, it also bought Shields Health Solutions for $1.37 billion and CareCentrix, Inc., a home health company, for $330 million.
After Walgreens’ investment, VillageMD kept expanding, announcing 12 deals since 2021, including an $8.9 billion acquisition for Summit Health-CityMD, a popular urgent care and primary care network in the New York City area.
That massive spending spree put Walgreens in hot water, enough for it to explore a sale of its own that came to light late on March 6, 2025. The buyer, private equity firm Sycamore Partners, is offering $11.45 per share in cash at closing and also $3 in cash per share “from the future monetization of Walgreen’s debt and equity interests in VillageMD, which includes the Village Medical, Summit Health and CityMD businesses,” as noted in the press release.
Sycamore Partners is a private equity firm based in New York specializing in consumer, distribution and retailrelated investments. The firm has approximately $10 billion in aggregate committed capital. This is the firm's first forway into the healthcare industry, it seems, but it does have plenty of investments in the retail space.
Uncertain Optimism: The Healthcare Outlook from HPE Miami
Earlier this month, more than 2,200 healthcare leaders convened for McDermott Will & Emery’s Healthcare Private Equity (HPE) Miami conference to discuss the challenges and trends shaping the healthcare industry in 2025. For two days in the Miami sun, attendees were able to engage with panels that covered topics ranging from how to navigate private equity investments to what the hot investment sectors are.
A plethora of topics were explored by panelists and perspectives, and although opinions varied on the trajectory of M&A activity in 2025, a prevailing sentiment of cautious optimism emerged… if investors play their cards right.
Several themes stuck out to the LevinPro HC team: the importance of work culture to retain employees, M&A trends shifting away from traditional healthcare models towards new models, and the Trump administration presenting uncertainty for the healthcare landscape.
One of the panels that stood out centered around how to combat the labor and physician shortage, focusing on creating a work culture that promotes accountability and responsibility. It should be noted that as media coverage of the conference the Levin team was bound by Chatham House Rule so will be referring to all panelists as anonymously as possible.
“Don’t assume that culture is static,” said one speaker, who is on the executive leadership team of an Illinoisbased medical group. With this idea, the panelists addressed the need to create a work culture that shifts with the needs of the company as well as the employees. In doing so, physicians, and other healthcare providers, will have a stronger reason to stay at the company. Things like transparency from leadership, providing a stake in the company and never compromising quality of care were echoed across the panel as essential qualities to retain employees.
Another panelist expanded on this idea but spoke directly to the fact that top-tier talent is leaving the healthcare field, no matter the salary. While the labor shortage is not a new topic to many healthcare leaders and conferences, it was refreshing to hear the panelists speak to the idea that more than just money retains employees. “Providing not only a stable but a predictable income helps retain talent,” said a panelist, from a medical device manufacturer based in Colorado. A company that implements these strategies effectively will be better equipped to navigate potential challenges posed by tariffs and high interest rates.
And high interest rates were another major concern for many of the panels. “[I don’t] really see a low cost of capital coming back anytime soon,” said one speaker from a Boston financial services firm on a panel that focused on hot investment sectors, highlighting how the cost of capital is a concern for many speakers across the conference.
The speaker cited that part of the reason for this is that historical outlets that would relieve pressure for cost of capital can only relieve so much pressure. And limited partnerships are feeling that pressure. However, he remained optimistic that there would be more deals this year because there is a continuing shift away from traditional provider models towards commercialization models that will drive transactions.
This panelist, along with the other speakers, believe that the hot sectors currently driving transactions in the healthcare space are the ones that “go beyond the traditional payor models,” such as MedTech, pharma services and digital therapeutics.
One panelist from a New York-based private equity firm said, “Pharma services is an area of interest for investors because of drug pricing and regulatory risk. Currently, there are a lot of high-cost specialty medications being approved, which raises questions such as: Will insurers and patients be able to afford these medications? Does the infrastructure exist to deliver these medications? Will patients understand the economic value of these medications? All of this creates interest.”
However, he did note that despite these factors, there is uncertainty for how long the high demand will remain as investors may struggle to find companies that will foster the shift away from traditional provider models. Although, to be clear, nobody was saying that things like MedTech or pharma services will replace physicians from a patient’s perspective, there will always be a need for physicians, but rather that M&A volume is shifting to more technology-based sectors.
The final hot button topic that circulated throughout many of the different conversations was how the Trump
administration could impact healthcare and healthcare M&A. The same panelist from the previously mentioned New York firm expressed less concern over conventional fears like Medicare or Medicaid Advantage cuts, viewing that as unlikely due to their essential nature and political sensitivity. Instead, he focused on unpredictable shifts, such as pricing regulations and policy changes.
“With any new administration, there’s always going to be a flurry of activity. So, try to minimize reimbursement risk across your portfolio,” he said. This speaker continued to suggest that companies, to manage stroke-of-the-pen risk, could focus on private pay businesses like MedTech that are not directly reliant upon reimbursement pricing. Overall, this speaker presented a message of ‘not putting the cart before the horse’ and to not stress before there’s something to be stressed about.
On the other hand, there were several panelists that expressed more concern with the new administration. A speaker from a New York venture capital firm highlighted the Trump administration’s rapid policy shifts posing challenges for investors. She even joked that advice she gave today may be moot by tomorrow. She also emphasized the need for risk management and strategic investment decisions to either adapt to or influence this fast-paced environment.
Another panelist from a Boston-based investment firm, believes that during the Trump administration there may be less enforcement of regulatory laws in the hopes of creating new business opportunities. This was met with a level of caution, which was shared amongst the panelists and the audience.
Overall, the conference underscored the resilience and adaptability of the healthcare sector, as well as opportunities for investors. As companies ready for a year of strong M&A activity, the HPE Miami conference may have provided (or altered) some strategies for navigating an evolving and uncertain regulatory and financial landscape.
The advocacy group America’s Essential Hospitals was not happy with the recent budget resolution either, saying it “will open the door to devastating Medicaid cuts that will impact millions of Americans, especially those middle-to-low-income working Americans in both rural and urban communities.”
According to the American Hospital Association, 96% of hospitals have 50% of their inpatient days paid by Medicare and Medicaid, and more than 82% of hospitals have 67% Medicare and Medicaid inpatient days.
These changes in reimbursement could have a dramatic effect on Hospital M&A; more hospitals could end up in financial distress, driving those organizations to find larger partners or financial backers. Not to mention the number of bankruptcies we could see.
The recent budget resolution is only a seven-month extension, so nothing is permanent yet, but we’ll be following how this shakes out in Washington and how it shapes the healthcare market.
Nonetheless, there have been some notable activity and events in the hospital M&A market from the past three months worth highlighting.
Top Hospital M&A News of Q1
There was a huge deal announcement in Europe in late January. PureHealth, one of the largest health systems in the Middle East, purchased Hellenic Healthcare Group (HHG) for $2.3 billion. HHG, which was 90% owned by CVC Capital Partners, operates 10 hospitals totaling 1,600 beds and serves 1.4 million patients annually.
On completion of the transaction, CVC Capital Partners and HHG management will retain a 40% stake in the health system. PureHealth aims to integrate HHG’s infrastructure into its existing network, boosting its international operations and targeting 50% of its revenue from outside the Gulf region.
Pure Health is an integrated healthcare solutions
platform with a diversified portfolio of over 25 hospitals and more than 100 clinics offering 200 specialties covering services from tertiary care to primary care.
The acquisition of HHG isn't PureHealth's first foray in the European market. Back in 2023, the organization purchased London-based Circle Health Limited from Centene for $1.2 billion. Circle Health is one of the largest health systems in the United Kingdom, operating 53 hospitals across the region.
In the United States, HCA Healthcare sold the Regional Medical Center of San Jose, a short-term acute care hospital in California, to the county government of Santa Clara.
The asset purchase agreement signed by both parties, valued at $150 million, will integrate the 258-bed hospital into the Santa Clara Valley Healthcare system.
The county plans to restore level 2 trauma care immediately and will add comprehensive stroke and STEMI services after, with labor and delivery to be restored in the future.
Prime Healthcare Services, Inc. finalized its acquisition of Central Maine Healthcare, an integrated healthcare delivery system serving 400,000 people living in central, western, and mid-coast Maine.
The system generates more than $500 million in revenue across three hospitals and several outpatient care centers. The acquisition is expected to close by the end of 2025, subject to regulatory approvals.
Hospital Market News & Updates
California-based Prospect Medical Holdings filed for Chapter 11 bankruptcy in the United States Bankruptcy Court in Northern Texas. The health system declared $1 billion to $10 billion in both assets and liabilities and said it had more than 100,000 creditors in its initial court filing. Prospect operates 16 hospitals across the East Coast and California and plans to use the bankruptcy process to realign its portfolio.
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The filing from Prospect feels eerily similar to the situation surrounding Steward Health Care’s bankruptcy filing in May 2024. Two health systems, both backed by private equity firms for more than a decade, suddenly file for bankruptcy once the firm exits their investment. The timing seems to be more than a coincidence.
A recent report from the Senate Budget Committee found that Prospect, under the ownership of Leonard Green & Partners, took on massive debt loads while paying the private equity firm nearly $500 million in dividends and preferred stock redemption.
We’re still in the early days of this bankruptcy proceeding, but we suspect it will bring even more attention to private equity’s role in healthcare.
Even health systems are developing AI solutions. Mount Sinai announced it launched the Center for Artificial Intelligence (AI) in Children’s Health, the first dedicated center of its kind in New York City.
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According to the press release, “the Center will develop AI-powered solutions to enhance diagnostics, personalize treatments, and optimize health care delivery for youth and adolescents.”
A flurry of executive orders from President Trump has created a lot of upheaval in the hospital market, including the reversal of Biden-era policies that scale back ACA provisions and rescind CMS’ drug-price initiatives. The United States even withdrew from the World Health Organization on January 20.
In larger market news, the Federal Reserve kept interest rates unchanged in their March 2025 meeting. Jerome Powell, in his post-meeting news conference, acknowledged some of the chaos brought on by the shifting tariff policies from the Trump Administration and said that “it remains seen how these developments affect future spending and investment.”
Top Deals March 2025
Behavioral Health Care
Palo Verde Behavioral Health Ctr. Private Universal Health Services NYSE: UHS 3/18/2025 $19,065,000 Tucson, AZ King of Prussia, PA
In Brief: Palo Verde Behavioral Health Center is an 84,029-square-foot inpatient behavioral health facility located in Tucson, Arizona. Universal Health Services had been leasing the majority of the facility as its anchor occupant. The facility is situated on nearly eight acres and is strategically located on the campus of Tucson Medical Center, a 641-bed hospital. Palo Verde Behavioral Health Center was originally built in 1985 but has undergone a series of upgrades over the years including the addition of a new south wing in 2015.
Top Deals March 2025 Rehabilitation
TARGET
1 inpatient rehabilitation facility N/A Sila Realty Trust, Inc.
3/4/2025 $35,120,000 Knoxville, TN Tampa, FL
In Brief: The inpatient rehabilitation facility is located in Knoxville, Tennessee. The facility is a 57-bed, inpatient rehabilitation facility offering programs to provide care and therapy for neurological rehabilitation, stroke rehabilitation, brain injuries, spinal cord injuries, amputation and orthopedics. The approximately 70,000-square-foot facility was built in 2021 and is fully leased to Knoxville Rehabilitation Hospital, LLC, a joint venture between the University of Tennessee Medical Center, Lifepoint Health and an affiliate of Community Health Systems, Tennova Healthcare.
Top Deals March 2025
Walgreens Boots Alliance, Inc. NYSE: WBA Sycamore Partners
Other Services
$17,935,000,000 Deerfield, IL San Diego, CA
In Brief: Walgreens Boots Alliance is an integrated healthcare, pharmacy and retail company. It has more than 12,500 locations across the globe, and owns several healthcare companies including Village Medical, Shields Health Solutions, CareCentrix, Inc., Summit Health and CityMD businesses. According to its 2024 fiscal annual report, its sales totalled $147.7 billion and it recorded an operating loss of $14.1 billion. For its healthcare segment specifically, it had sales of $8.345 billion. The company also had $8.04 billion in long-term debt and an EBITDA loss of $11.6 billion, based on depreciation and amortization of $2.5 billion and its operating loss.
Top Deals March 2025
Chimerix
Biotechnology & Pharmaceuticals
NASDAQ: Jazz Pharmaceuticals plc NASDAQ: 3/5/2025
$935,000,000 Durham, NC
CMRX Dublin, Ireland JAZZ
In Brief: Chimerix is a biopharmaceutical company with a mission to develop medicines that meaningfully improve and extend the lives of patients facing deadly diseases. Chimerix's lead clinical asset is dordaviprone, a novel first-in-class small molecule treatment in development for H3 K27M-mutant diffuse glioma, a rare, high-grade brain tumor that most commonly affects children and young adults.
DR-0201 N/A Sanofi
NASDAQ: 3/19/2025
$600,000,000 N/A Paris, France SNY
In Brief: DR-0201 (Dren-0201) is an autoimmune disease treatment developed by Dren Bio, a Foster City, California-based clinical-stage biopharmaceutical company focused on developing therapeutic antibodies for the treatment of cancer, autoimmune and other serious diseases. DR-0201 is a targeted bispecific myeloid cell engager that has shown robust B-cell depletion in pre-clinical and early clinical studies.
Deal Volume, March 2025 vs. February 2025 and March 2024
Announced Deal Value, March 2025 vs. February 2025 and March
