Strategic Partnerships and Private Equity to Fuel Increased Healthcare and Life Sciences Transaction Activity in 2025, New BRG Report Finds
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Following disappointing deal volumes in 2023 and 2024, a significant majority of providers (82%), payers (96%) and life sciences (70%) executives anticipates transaction activity in their respective verticals to increase in the year to come, according to BRG’s 2025 US Healthcare & Life Sciences Transactions Outlook, released today.
Drawing on insights from a comprehensive survey that involved more than 150 executives and corporate decision-makers at US provider, payer and life sciences organizations—as well as in-depth interviews with BRG industry experts—the report reveals key transaction drivers, focus areas and deal types, as well as critical hurdles to getting deals done.
Key Drivers, Focus Areas and Deal Types
BRG’s report finds that transaction activity will be driven in large part by providers’ labor challenges; payers’ ongoing Medicare Advantage penetration and transitions to value-based care; and life sciences firms’ portfolio enhancements ahead of key patent expirations. The most transaction activity is expected in the primary care (provider), managed care (payer) and biotechnology (life sciences) areas.
Meanwhile, more than 8 in 10 respondents indicated that they will likely be involved in an investment or transaction related to artificial intelligence (82%) and cybersecurity (84%) in the next twelve months.
“The industry is eager to bounce back from the inflation, high interest rates and regulatory pressures that have put a strain on deal activity in the past few years,” said David Wildebrandt, a BRG managing director. “Whether it’s the imperative to adopt new technologies or stake out a competitive advantage in an increasingly crowded marketplace, organizations are looking to transactions to seize new opportunities. The challenge now is to move forward strategically.”
The report finds that strategic partnerships are the most anticipated deal type across verticals, followed by mergers and acquisitions, restructuring and joint ventures. Private equity players in particular are expected to fuel activity as they look to deploy substantial amounts of dry powder and seek attractive exits after long hold periods for sector assets.
Financial, Strategic, Operational and Regulatory Challenges Abound
Though the report outlines near-term optimism and clear transaction drivers, market conditions also require organizations to be strategic moving forward.
When it comes to completing transactions, providers are most concerned with financial issues like working capital requirements and integration costs. Payers voiced concern about operational inefficiencies and workforce retention. And life sciences executives are more anxious than their payer–provider counterparts about strategic alignment and emerging competitors.
In addition, as the Trump administration shakes up US policy, the report finds that fewer than 5% of respondents do not have regulatory concerns when considering a transaction. Top-ranked concerns include billing, pricing and reimbursement compliance, as well as data privacy and security requirements.
Strategies for Successful Dealmaking
Throughout the report, BRG experts and key industry players offer important insights into how best to navigate the current dealmaking environment.
“Assuming a reasonably favorable macro environment, the need to reinvest in core functions and emerging technologies like AI and cybersecurity will continue to heighten interest in dealmaking,” said Tom O’Neil, a BRG managing director. “The key will be to steer through persistent hurdles—such as regulatory concerns, labor shortages and operational inefficiencies—by maintaining a keen strategic focus every step of the way.”
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