Healthcare M&A Market Update, 2026

Healthcare M&A activity in the United States has continued to shift at a pace that makes market awareness essential for any physician practice owner or healthcare operator evaluating strategic options. Whether benchmarking an unsolicited private equity offer, timing a potential sale, or simply tracking where valuations stand relative to prior cycles, having an accurate read on current deal volume, buyer behavior, and pricing is foundational to informed decision-making.

Our analysis focuses primarily on the U.S. market. The four sections that follow present the data by aggregate market volume, subsector activity, physician specialty valuation multiples, and key market drivers shaping deal flow heading into the second half of 2026.

Overall Healthcare M&A Deal Volume and Capital Deployed

The healthcare M&A market sustained meaningful momentum through 2025 and into 2026, despite an environment marked by geopolitical tension, reimbursement pressure, and evolving federal policy.

Total deal volume in 2025 reached 3,373 transactions, and full-year 2026 volume is on pace for an estimated 3,316 deals, a modest 1.7% decline attributable largely to buyer hesitation amid Middle East instability and ongoing U.S. tariff uncertainty, offsetting the positive effect of interest rate reductions and substantial private equity dry powder.¹ Q1 2026 alone registered 829 closed transactions, a 1.6% increase over Q1 2025’s 816 deals, with North America accounting for 436 of those, the most active region globally.¹

Connect with Our Healthcare Team

The Healthcare M&A Market: Annual Deal Volume and Capital Invested, 2023-2026

Three findings stand out from this dataset.

Healthcare M&A Activity by Subsector

Healthcare Services dominated Q1 2026 by transaction volume with 444 deals, followed by Pharmaceuticals and Biotechnology (178), Healthcare Devices and Supplies (116), and Healthcare Technology Systems (91).¹ Several high-growth segments (behavioral health, dental, and eHealth) recorded particularly notable year-over-year performance in 2025, establishing a strong baseline from which 2026 activity is expected to grow.

Healthcare M&A Deal Volume by Subsector: Q1 2026 and Full-Year 2025

The behavioral health figure is particularly significant. According to LevinPro HC, the sector recorded a 42% increase in deal volume over 2024, reaching 104 transactions, its highest activity level since 2022.² Underlying demand remains structurally elevated: more than 122 million Americans, approximately one-third of the U.S. population, live in a federally designated mental health shortage area.²

The eHealth segment also reached a three-year high with 299 deal announcements in 2025, a 21% increase over the prior year, with nearly 20% of those transactions specifically targeting companies offering AI-enabled services or features.²

Physician Practice Valuation Multiples by Specialty

Private equity remains the dominant buyer type in physician practice M&A, representing 54.6% of all healthcare deal volume in Q1 2026, the first quarterly increase in PE’s share in five years.¹

As of Q1 2026, the median EV/EBITDA multiple for PE-backed healthcare deals registered 10.7x, down from 15.3x in 2025, while the median multiple for strategic acquirers rose to 13.4x from 9.0x, the highest strategic median recorded in the last five years.¹ At the individual practice level, specialty and scale remain the two most powerful determinants of valuation.

Average EV/EBITDA Multiples by Physician Specialty – 2026

*These ranges reflect consensus data from 2024-2025 transactions compiled by Levin Associates, Pitchbook, and Chambers and Partners, supported by their respective deal experience. Methodology triangulates these benchmarks with recent high-signal transactions-most notably Cencora’s acquisition of Retina Consultants of America (retina MSO) and TPG/AmerisourceBergen’s OneOncology deal, which included a 19× EBITDA put-call. Broader sector context for women’s health, urology, and aesthetics is drawn from specialty white papers and market reports. Actual pricing continues to vary by scale, ancillaries, payor mix, regional density, and growth profile.

Actual pricing varies with each transaction based on many factors. Intended for educational purposes only and not a guarantee of any outcome.

Platform transactions command 3-5 turns higher multiples than add-on acquisitions across virtually all specialties, reflecting the premium buyers assign to size, management depth, geographic density, and scalability.¹ Practices demonstrating strong payor diversification and meaningful ancillary revenue lines can achieve multiples up to 2x higher than comparable single-revenue-stream groups.³

Cardiology and ophthalmology remain the two most sought-after specialties in 2026, with retina platforms attracting particular attention following Cencora’s acquisition of EyeSouth Partners’ retina business for $1.1 billion, the largest eye care purchase price recorded in five years.⁵

Key Market Drivers and Headwinds in 2026

The healthcare M&A landscape in 2026 is shaped by a convergence of structural tailwinds and regulatory headwinds. Understanding both is essential for owners evaluating transaction timing and structure.

Healthcare M&A: Key Market Drivers vs. Headwinds, 2026

PwC projects that healthcare M&A deal value and volume will grow in 2026, with behavioral health platforms, ambulatory surgery centers, and home infusion services commanding the strongest multiples among high-growth subsectors.³ Especially on the technology side, strategic buyers and PE sponsors are increasingly treating AI capabilities as a core acquisition criterion rather than a differentiator.

PitchBook describes this shift as a move toward “AI-native infrastructure,” meaning targets that cannot demonstrate embedded technology are commanding lower valuations relative to peers.⁶ Healthcare services sellers who approach the market with well-documented EBITDA growth trajectories, diversified payor relationships, and operational infrastructure in place are best positioned to capture premium pricing in this environment.

Requesting a Copy of This Report

FOCUS Investment Banking specializes in maximizing transaction value for healthcare practice owners through our proven quarterback approach to M&A advisory. Our team has completed numerous transactions for physician groups, dental practices, behavioral health organizations, and related healthcare services companies.

If you would like to learn more about how current market conditions may affect the valuation of your practice, or to request a PDF copy of this report, you can reach out to Eric Yetter ([email protected]) or Andy Snyder ([email protected]).

Connect with Our Healthcare Team

Sources: