Merger and acquisition consolidation, common in many industries, has slowed for healthcare in 2024 due to multiple factors, writes Shawn Janus, national director of healthcare services for Colliers. The economics were strained as increased interest rates, the resulting capital costs, increased regulatory scrutiny, and a slower-than-expected pandemic recovery made large transactions harder to finance. However, a few fundamental factors will likely drive M&A activity in the sector through 2025.
Healthcare M&A deal volume dropped 20% between 2023 and 2024. Total deal values were down 29% year-over-year. Deal volume and value fell respectively by 18% and 31% in the pharmaceutical and life sciences sectors. Healthcare services saw year-over-year drops of 22% in volume and 21% in value.
Nevertheless, “private equity remained active, particularly in medtech and digital health,” Janus wrote. Some of the standout transactions were KKR's 50% stake in Cotiviti, the $4.1 billion acquisition of Solventum’s purification business by Thermo Fisher Scientific, and AbbVie’s purchase of ImmunoGen for $10.1 billion.
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