If healthcare M&A activity of February 2025 is any indication for how the rest of the year will play out, 2025 may not be a year of strong activity. According to data captured in the LevinPro HC database, throughout the month, there were 114 healthcare transactions reported. This is a 49% decrease from the 223 announced in January 2025 and a 17% decline from the 138 reported in February 2024.
The most active sector was the Other Services sector with 30 transactions. This is not surprising considering Other Services encompasses medical outpatient buildings (MOBs), which has seen notable demand over the past few years. In February 2024, 37 transactions were reported, and in January 2025, 50 Other Services acquisitions were reported.
Within the Other Services sector, the subsector with the most activity was MOBs with a total of 15 deals. This marks a 35% drop from January 2025 with 23 transactions, and essentially on par with February 2024 with 15 deals.
Physician Medical Groups (PMG) was another active sector, totaling 28 transactions. This is 22% less than that of February 2024 when 36 PMG deals were reported. Dental, which is typically due to the fragmented nature of the market and high cash flows of those practices, saw the highest amount of deal activity with nine deals.
MB2 Dental Solutions, backed by Charlesbank Capital Partners and Warburg Pincus, was the only PMG buyer to complete two transactions throughout the month. MB2 Dental Solutions partners with dentists and specialists. Founded in 2007, MB2 offers general dentistry services, orthodontics, cosmetic dentistry and oral surgery. MB2 Dental has announced the most transactions (150) of any PE-backed groups over the last five years. More information and statistics such as this can be found in The Healthcare Services Acquisition Report, which was published in February.
Other buyers who announced a transaction in the PMG space were Epiphany Dermatology, Eye Health America and U.S. Oral Surgery Management.
eHealth had 18 reported transactions, Biotechnology/Pharmaceuticals had 13 deals and Home Health & Hospice had seven.
Private equity (PE) firms account for nearly 31% of the completed transactions of the month, marking the most active buyer type. This falls in line with past months as PE has consistently been one of the most active (usually the most active) acquirer type for the past five years, averaging between 30 to 35% of the announced transactions per year. This is slightly higher than the 42 PE deals announced in February 2024, representing 30% of the deals. PE groups that announced deals include LLR Partners, KKR & Co. Inc. and NMS Capital.
Real estate investment firms reported nine transactions, investment firms reported six deals, and health systems announced two acquisitions.
The buyer with the most transactions, regardless of sector, in February 2025 was Montecito Medical Real Estate with four acquisitions. Montecito Medical Real Estate specializes in healthcare-related real estate acquisitions and funding. Since 2006, it has completed transactions involving more than $5 billion in medical real estate across the United States.
In February, the company purchased a three-building portfolio spanning Ball Ground, Woodstock and Dawsonville, Georgia; a two-building portfolio in Canton, Ohio; one MOB in Chandler, Arizona; and one MOB in Fayetteville, Georgia. In February, Montecito Medical purchased 213,465 square feet. Additionally, since the start of 2025, Montecito Medical has announced nine transactions. Throughout 2024, the company completed 27 transactions, totaling 916,914 square feet.
Disclosed spending throughout February 2025 totaled more than $8.39 billion across 26 transactions. Compared to February 2024, this is a significant decrease, which saw more than $37.09 billion across 32 transactions in purchase prices. Most of the transactions with a disclosed price were in the Biotechnology and Pharmaceutical sectors.
The largest deal in February 2025 was Bain Capital’s acquisition of Mitsubishi Tanabe Pharma Corporation (MTPC), a Japanese company, for $3.3 billion.
MTPC, the pharmaceutical arm of Mitsubishi Chemical Group, is a research-driven pharmaceutical company focused on treatments for autoimmune diseases, diabetes and kidney disease, diseases of the central nervous system and other conditions.
The investment is being led by Bain Capital’s private equity teams in Asia and North America together with the firm’s life sciences team. The transaction is expected to close in the third quarter of 2025.
Overall, February 2025 showcased a decline in healthcare M&A activity, especially in comparison to year over year numbers. While this is discouraging for investors, we also believe that deal activity will not plummet to the lows that it was during the pandemic. In this, we predict that consolidation and strategic investments will continue to shape the healthcare landscape in 2025.
