The 2025 healthcare M&A market is off to a slow start, based on preliminary results for the first three months. Continuing to dip from the 223 announced in January 2025, there have been 126 transactions reported, to date, in March, according to data captured in the LevinPro HC database. This is on par with the 124 transactions reported in February 2025. However, March represents a 16% drop from the 150 in March 2024.
Additionally, March brings Q1:25’s total deal volume to 482 transactions, representing a 6% decline from 511 transactions announced during Q1:24.
The most active sector was Physician Medical Groups (PMG) with 36 recorded deals for March. It is not surprising that PMG had the highest deal volume, as investors often pay close attention to the sector due to the fragmented nature of the market. The deal volume in March is slightly more than the 28 PMG deals reported the previous month. Yet, it is 16% less than the 43 announced in March 2024. In total, 105 PMG deals were announced throughout the first quarter.
Within the PMG space, the subsector with the most deals was dental, totaling 61% of the PMG deals (22 transactions). This represents an increase from February, which saw 13 acquisitions. Other PMG specialties with notable deal activity were dermatology and eye care, with three deals each.
MB2 Dental Partners reported the most deals with three transactions, expanding its presence by three practices in seven physicians. MB2 Dental Solutions is a portfolio company of private equity firm Charlesbank Capital Partners and Warburg Pincus and was founded in 2007. The practices it purchased in March are based in Bloomington, Illinois, St. Louis, Missouri and Syosset, New York.
Other Services was another active sector with 27 transactions, a 13% drop from the 31 in February. The activity in February is a continued decline of deal activity for the sector as there were 50 Other Services transactions announced in January. However, it is essentially the same as March 2024 when there were 26 deals. It should be noted that Other Services was the busiest sector in Q1:25 with 111 acquisitions.
In the Other Services space, medical outpatient buildings (MOBs) were the most active vertical, totaling 10 transactions in March.
The largest deal in the MOB space was the acquisition of a four-building portfolio in Gilbert, Arizona by a joint venture between Woodside Health, LLC and Heitman LLC. The buildings totaled 39,000 square feet, and according to official press release, this was the eighth property the joint venture has purchased in the last five months.
Woodside Health is a private equity firm that invests in healthcare real estate. Since 2008, the firm has acquired more than 3 million square feet of healthcare real estate and closed more than $1 billion of transactions.
Founded in 1966, Heitman is a global real estate investment management firm with approximately $53 billion in assets under management. The firm also recapitalized a Texas and North Carolina-based portfolio alongside Global Medical REIT. Newmark announced the recapitalization of the portfolio, which comprises 115,604 square feet.
There were 19 eHealth transactions, nine in the Biotechnology and Pharmaceuticals market and six Laboratories, MRI, and Dialysis deals.
Private equity (PE) firms and their portfolio companies account for approximately 33% (42 deals) of the completed transactions in March, the most active investor type of the month. This aligns with previous months, as private equity has consistently been among the leading investor type over the past five years, accounting for an average of 30–35% of announced transactions annually.
PE investment activity was up in March 2025 compared to last year’s numbers, where the firms only announced 26% of all deals, or 40 transactions. PE buyers who announced at least one deal in March include Five Arrows Capital Partners, KKR & Co. Inc. and Zenyth Partners.
Real estate investment firms reported nine deals in March. Remedy Medical Properties acquired an Arlington, Virginia MOB for $47 million. The company is a full-service healthcare real estate company and the largest private owner of healthcare properties in the country, with more than 33 million square feet and 25 offices spanning 43 states.
The eight-story medical outpatient building, often called Arlington Medical Center, is located in Arlington Medical Center, Virginia. Systems housed in the MOB include Inova Health System and Virginia Heart. The square footage of the MOB was not disclosed.
There were six transactions with health systems as the buyer. The largest deal in terms of purchase price in this space was Universal Health Services’ acquisition of Palo Verde Behavioral Health Center for more than $19 million.
Universal Health Services operates 26 acute care hospitals, 334 behavioral health facilities, 39 outpatient facilities and ambulatory care access points, an insurance offering, a physician network and various related services. It is located in 39 U.S. states, Washington, D.C., Puerto Rico and the United Kingdom.
Palo Verde Behavioral Health Center is an 84,029-square-foot inpatient behavioral health facility located in Tucson, Arizona. The facility sold for $226.89 per square foot.
The only health system to have purchased a hospital in March was Deaconess Health System, based in Evansville, Indiana, that bought Jennie Stuart Health, an acute-care hospital licensed for 194 beds in Hopkinsville, Kentucky. There was no disclosed price.
Disclosed spending throughout March 2025 totaled more than $29.1 billion across 23 transactions. Compared to February 2025, this is a significant increase, which saw more than $8.4 billion across 28 transactions in purchase prices. In total, disclosed spending reached more than $66 billion over 88 deals.
Much of the disclosed spending is due to Sycamore Partners’s acquisition of Walgreens Boots Alliance, Inc. (WBA) for $17.935 billion in cash, plus debt. WBA owns several healthcare companies including Village Medical, Shields Health Solutions, CareCentrix, Inc., Summit Health and CityMD businesses. According to its 2024 fiscal annual report, its sales totaled $147.7 billion and it recorded an operating loss of $14.1 billion.
Sycamore Partners is a private equity firm based in New York specializing in consumer, distribution and retail-related investments. The firm has approximately $10 billion in aggregate committed capital.
WBA shareholders will receive total consideration of $11.45 per share in cash at closing of the transaction, giving this deal a total value of approximately $9.9 billion. The total price also includes the company’s long-term debt, as reported in Walgreens’ recent SEC filings
Overall, March 2025 saw a decline in healthcare M&A activity, particularly compared to the same period last year. While this may be discouraging for investors, we believe deal activity won’t drop to the lows seen during the pandemic. Instead, consolidation and strategic investments will continue to shape the healthcare landscape throughout 2025.
