Healthtech M&A in 2026

Tech M&A activity in the healthcare technology market, which grew rapidly in volume and deal size in 2025, is continuing its upward momentum in 2026. There were 149 M&A deals in healthtech in the first quarter of 2026, on pace to exceed 2025’s full year total of 555. Underscoring this pace was strong interest from both strategic and financial buyers, with PE firms accounting for 31% of the deals. Disclosed deal value in the quarter was $22.7 billion, already approaching 2025’s full year total of $30.3 billion. The actual deal value for Q1 2026 is likely higher, given the fact that only 15% of the healthtech transactions in the quarter disclosed deal values. In addition, there were three megadeals of over $1 billion in the sector in the quarter.   

Factors fueling the healthtech M&A market

There are a number of factors fueling the growth in healthtech M&A. One of them is the maturation of artificial intelligence (AI) in healthcare settings. Buyers are targeting AI solutions that can improve patient outcomes, support new treatments, and lower operational and clinical costs. Another factor is the need for better revenue cycle management (RCM) solutions, as hospitals and healthcare systems face increasing financial strain pushing them to adopt automated tools that lower the cost-to-collect from patients. Other factors include continued strategic consolidation in the healthcare industry, regulatory changes, and increased interest by Private Equity investors.

Maturing AI

AI is a primary driver of tech M&A in the healthtech sector in Q1 2026, as buyers target platforms with proven AI-enabled workflows. For example, AI-powered health informatics software provider DeepHealth acquired Gleamer, a cloud-first, radiology AI company based in France. Gleamer's broad multimodality portfolio of FDA-cleared and CE-marked clinical AI and workflow solutions for musculoskeletal, breast, lung and neurologic is designed to improve quality of care while reducing radiologist workload.

Another example is pharmaceutical company AstraZeneca’s purchase of biomedical AI startup Modella AI. AstraZeneca plans to integrate Modella AI's foundation model and AI agents into its oncology research and development to support clinical development and biomarker discovery.

Demand for RCM solutions

Hospitals and healthcare systems are facing many obstacles, such as payer restrictions, authorization bottlenecks, and shortages of skilled medical coders and billing staff, that are driving demand for effective RCM solutions. In response, acquirers are targeting RCM firms. 

For example, Innovaccer, an AI infrastructure provider for autonomous healthcare operations, recently bought RCM solutions provider CaduceusHealth for $66 million. The deal integrates Caduceus Health's billing and claims processing into Innovaccer's Gravity AI platform to predict denials and close revenue gaps.

RCM companies are not only being targeted by strategic buyers, financial buyers such as PE firms are buying RCM companies to capture predictable cash flows, exploit market fragmentation, and deploy AI-driven automation. For instance, PE firm The Carlyle Group recently acquired a majority stake in two healthcare RCM companies: Knack RCM and EqualizeRCM to create an AI-native, global, multi-specialty RCM platform.

Consolidation in the healthcare industry

Consolidation across the healthcare industry is strongly fueling M&A in the healthtech space in 2026. As health systems and payers face high operating costs and margin compression, they are acquiring technology platforms to drive scale, automate workflows, and integrate care. In some cases larger healthcare providers are acquiring smaller ones to generate growth. For instance, remote-care and musculoskeletal tech provider Sword Health acquired its smaller peer, digital disease management company Kaia Health, for $285 million to expand its guided therapy platform.

In other cases, healthcare providers are merging to enhance their health infrastructure across an expanded network. For example, northern California-based healthcare system Sutter Health announced a merger with Minnesota-based healthcare system Alina Heath. The merger combines Sutter Health's AI and platform development focus with Alina Health's engineering and medical technology hub to improve patient access and affordability, leverage regional tech strengths, and reduce administrative burdens. 

In addition, health providers are consolidating by executing bolt-on tech acquisitions. One example in the pharmaceutical industry was Merck & Co.'s $6.7 billion megadeal purchase of Terns Pharmaceuticals. Merck's main objective in the deal is acquiring Terns Pharmaceuticals' experimental leukemia drug TERN-701, an oral treatment for chronic myeloid leukemia that early data suggests could challenge existing oral medications such as Novartis' Scemblix.

Consolidation in the healthcare industry is expected to continue through 2026, driven by financially strained health systems that are selling properties or merging with larger dominant systems, and the pursuit of technology integration, especially in AI workflows and digital health data infrastructure.

Regulatory changes 

Increased regulatory requirements, such as strict cybersecurity mandates, complex AI governance rules, and fragmented cross-border policies, are driving M&A deals in healthtech. One example is PE firm Veritas Capital's majority stake acquisition in Global Healthcare Exchange (GHX). GHX operates a cloud-based supply chain and data automation platform that enforces vendor credentialing, product tracking, and regulatory documentation standards between healthcare providers and medical-surgical suppliers.

In another deal, healthcare IT company CareCloud acquired healthcare compliance and networking firm Empower Healthcare & Compliance Partners. The purchase integrates Empower's healthcare compliance services into CloudCare's AI-powered healthcare platform to offer expanded regulatory, audit-defense, and compliance services to healthcare providers

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 Q1 2026, targeting companies that offer advanced technologies and solutions that address the evolving needs of the  healthcare market.   

 Some examples are: 

• Kinderhook Industries acquired home health and hospice care provider Enhabit, Inc. for $1.1 billion.
• BV Investment Partners acquired a $240 million majority stake in Moxe Health, an EHR-neutral clinical data exchange platform.
• Veritas Capital acquired a majority stake in healthcare supply chain and workflow software platform Global Healthcare Exchange (GHX)

PE M&A activity in healthtech is expected to increase in 2026, driven by improving financing conditions, massive amounts of accumulated dry powder, and a strategic pivot toward tech-enabled platforms.

Summary

Tech M&A activity in the healthtech sector is continuing its upward momentum in 2026 and is expected to remain strong driven by factors such as the maturation of AI and proven AI-enabled workflows, the need for better RCM solutions, continued strategic consolidation in the healthcare industry, regulatory changes, and increased interest by Private Equity investors. 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.