The Growing Healthtech M&A Market

Tech M&A activity in the healthcare technology market is growing rapidly, with financial and strategic buyers targeting companies that offer products and technologies in a wide variety of healthcare-related areas ‒ from AI diagnostics, to electronic health record (EHR) platforms, to surgical robotics, to telehealth. 

In the first half of 2025, there were 277 M&A deals in healthtech, on pace to exceed 2024’s full year total of 467 deals. Disclosed deal value is on a growth path too. It was $10.3 billion in the first half of 2025, on pace to exceed 2024's full year total of $19.2 billion. The actual deal value for H1 2025 is likely much higher, given the fact that only 11% of the healthtech transactions in the first half of the year disclosed deal values. In addition, there were four megadeals of over $1 billion in the sector.   

There are a number of factors driving the surge in healthtech M&A. One of them is the rapid advancement of technologies that can improve patient care and operational efficiency. Other factors include strategic consolidation in the healthcare industry, regulatory changes, and increased interest by Private Equity investors.

Advances in technology

Rapid advances in technologies such as AI, data analytics, EHR, and telemedicine are improving patient care, enhancing diagnostics, and increasing access to services. It is also stimulating M&A deals targeting companies that provide those technologies.

For example, in France, Gleamer, a company that provides AI-powered solutions for X-rays and mammography, recently acquired two companies, Pixyl and Caerus Medical, that offer AI-powered MRI applications. The deals add MRI to Gleamer's comprehensive AI imaging portfolio.

Also, Isle of Man-based Juvenescence purchased U.K.-based Ro5. Juvenescence is a clinical-stage AI-enabled biotech company, while Ro5 is an AI drug discovery company. The deal is designed to bolster Juvenescence's AI/ML drug discovery capabilities and accelerate the development of AI-enabled treatments for age-related diseases.

Data analytics providers are also hot M&A targets, as witnessed by data-driven healthcare solutions company Cotiviti's over $3 billion acquisition of Edifecs, a healthcare data interoperability company. The combined entity aims to offer a broader suite of tools for improving healthcare delivery and efficiency, especially in areas such as administrative and medical cost reduction, and risk adjustment.

Consolidation in the healthcare industry

Healthcare organizations are consolidating to enhance efficiency, gain market share, and address challenges such as workforce shortages, regulatory complexities, and aging infrastructure. That consolidation is also driving mergers and acquisitions involving healthtech companies.

For example, in H1 2025, two hospital systems in the northeast U.S., Northwell Health and Nuvance Health, merged. One of the reasons for the merger is the potential for streamlined workflows and reduced redundancies resulting from standardizing protocols and sharing labor pools between the two systems.

The need to streamline workflows is also driving some recent M&A deals involving healthtech companies. One example is the acquisition of Corum client ImplantBase by Surgimate. ImplantBase is a provider of inventory logistics and sales operations software for medical device companies. Surgimate is provider of surgical coordination software. The deal creates a unified platform for surgical management, one that is expected to enhance efficiency at every stage of the surgical workflow, from pre-op planning to post-operative procedures.

Consolidation also brings with it a heightened need for data security. When a merger involves hospitals that have incompatible systems for things such as electronic medical records (EMRs), it leaves gaps in security that hackers can exploit. This is leading healthcare providers to look for companies that can provide sophisticated cybersecurity solutions, and stimulating M&A deals among companies that can provide these solutions.

For instance, Datavant, a health data platform company, recently acquired Ontellus, a provider of health records retrieval and claims intelligence. The objective is to provide an integrated, digital-first platform that securely connects those with health records to those who need them.

Regulatory changes 

The growing cost and complexity of complying with regulatory changes in healthcare is stimulating mergers and acquisitions of tech companies that can provide effective regulatory and compliance solutions to healthcare organizations. 

For example, in H1 2025, IT and cybersecurity managed service provider Abacus Group, merged with healthcare IT services company Medicus IT to create a managed IT services platform that will support infrastructure, cybersecurity, and compliance needs in healthcare as well as other regulated industries.

Also, cybersecurity company Axonius acquired medical device security specialist Cynerio to offer a combined platform that allows healthcare organizations to gain complete visibility of their assets, identify vulnerabilities and misconfigurations, and automate the enforcement of security policies to meet compliance requirements.

The need for effective regulatory solutions in healthcare will to grow over times as rapid advances in technologies such as AI, the Internet of Medical Things (IoMT), and telehealth introduces new ethical considerations that require regulation to ensure patient safety and data privacy.

Interest by PE investors

With trillions of dollars of dry powder on hand, Private Equity firms were eager   to make tech M&A deals in healthtech in H1 2025, targeting companies that offer advanced technologies and solutions that address the evolving needs of the  healthcare market. 

 Some examples are: 

• Clearlake Capital acquired ModMed for $5.3 billion. ModMed is a healthcare SaaS technology company  that specializes in cloud-based electronic health records and AI-powered solutions for various medical specialties.
• Bain Capital acquired HealthEdge for $2.6 billion. HealthEdge offers a SaaS platform that connects health plans, providers, and patients with a suite of end-to-end digital solutions to  automate operations, reduce administrative costs, and improve overall health outcomes.
• New Mountain Capital acquired a majority stake in Access Healthcare, an Indian revenue cycle management (RCM) group, for $2 billion. Access Healthcare partners with many of the largest U.S.-based healthcare organizations to deliver RCM operations.

PE M&A activity in healthtech is expected to increase over time as rapidly evolving technologies such as AI, data analytics, telehealth, and remote monitoring transform healthcare delivery, creating opportunities for PE firms to invest in companies with innovative  solutions for diagnostics, treatment, patient engagement, and administrative efficiency.

Summary

Tech M&A activity in the healthtech sector grew rapidly in H1 2025 and is expected to remain strong driven by the ongoing need for innovation, efficiency, and better patient care. Strategic and financial buyers are expected to continue to pursue acquisitions of companies that offer advanced technologies and solutions to address the evolving needs of the healthcare market.