McGuireWoods’ 17th Annual Healthcare Finance and Growth Conference brought together more than 200 healthcare leaders to explore the latest developments and challenges shaping the industry in 2024 and beyond. Through a combination of in-depth panels and engaging networking sessions, attendees had the opportunity to connect with industry peers and gain insights into emerging trends and sectors, from the future of telehealth to the evolving role of value-based care in driving healthcare outcomes. With 15 panels and 57 speakers, the conference covered a wide array of topics, offering actionable strategies for navigating the current and evolving healthcare investment market landscape.
On day two, the Current Healthcare M&A Environment panel took center stage, where industry experts shared their views on the latest trends in mergers and acquisitions. The LevinPro HC team was on-site to attend key sessions and gather insights from thought leaders across the healthcare investment market space.
The panel on the Current Healthcare M&A Environment provided a comprehensive overview of the market’s evolving dynamics. A common theme was cautious optimism, driven by regulatory changes and the stabilization of valuations after a period of inflated deal activity. The slowdown in early 2024 was largely due to ongoing economic uncertainties, but there was a consensus that conditions will improve going into 2025. Dealmakers are now focusing on more strategic acquisitions, particularly in high-growth areas like behavioral health and specialty care, which continue to attract strong investor interest.
Private equity’s growing influence was another major topic, as firms have remained active despite tighter financing conditions. This presence is shaping deal structures and valuations across healthcare sub-sectors, with consolidation, particularly in physician practices and home health services, expected to accelerate. Smaller players, such as specialty clinics, independent home health agencies and smaller physician groups, are increasingly looking for partnerships to scale and remain competitive.
The discussion also emphasized the impact of regulatory shifts on healthcare M&A, especially in reimbursement and payer models. These changes have introduced uncertainty but also new opportunities for strategic investors. Sectors like value-based care are becoming focal points for investment, with firms becoming more selective, targeting assets with strong growth potential and stability in a volatile healthcare investment market.
We caught up with Eugene Goldenberg, Managing Director at Edgemont Partners and a panelist on that day, to hear the key takeaways he wanted people to take from the discussion.
“2025 is shaping up to be a significantly more active year than what we’ve seen so far in 2024,” he said. “The year started out somewhat similarly to 2023, but we’ve seen a meaningful pickup in activity starting in early summer. A lot of processes are being teed up for 2025, and it’s going to be a much more crowded market.”
We also spoke to other panelists at the conference about their thoughts on the current healthcare M&A environment, including Jennifer Page, Director of National Accounts at CARR; Scott R. Witter, Managing Partner at Breakwater Advisers; Aaron Olson, Managing Director and Head of Healthcare Services at Bourne Partners; Evan Goldstein, Vice President, Healthcare Services at Bourne Partners; Craig Castelli, Founder and CEO of Caber Hill Advisors; and Maria G. Melone, Managing Director of Caber Hill Advisors. Here’s a look at what they had to say:
Q: What are the most significant trends you’re currently seeing in the healthcare market?
Jennifer Page, CARR: “I think the biggest thing is that healthcare organizations are moving away from purchasing real estate and are really focusing on leasing. The reason behind that is they want to reserve their capital for opening up more locations instead of sinking that money into a hard asset. A lot of these people in the early stages have the mindset that they want to own the real estate and the operations, but they quickly find out they run out of capital that way. Typically, a decision has to be made whether to be a landlord or to focus on operations.”
Scott Witter, Breakwater Advisers: ”A lot of the conversation revolves around the regulatory changes impacting physician practice rollups. Many private equity groups are asking themselves how these regulations will affect their M&A strategies. Some have even indicated they’ll back off from physician practice M&A until the situation is clarified. There’s still a lot of private equity activity in healthcare, but firms are shifting their focus, exploring opportunities in areas like behavioral health or outsourced pharmacy services. Although it’s a quieter market, I do feel things are picking up in certain sectors.”
Eugene Goldenberg, Edgemont Partners: “I think many of the trends are becoming more sub-sector specific. We’re seeing continued interest and proliferation of deals in the pharma services space, including clinical research sites, pharmacy supply chain, especially infusion (both home and ambulatory settings), med- spas/aesthetics and home and community-based services. Investors are looking to deploy resources outside the PPM space and areas that rely heavily on significant add-on activity. Organic growth of the underlying business is front and center and is getting a premium in today’s market.”
Evan Goldstein, Bourne Partners: “We expect to continue to see an increased volume of founder-owned businesses coming to market in the next year. As demand in the sector continues to be strong, especially during and post-COVID, many founders have reached the size where they can really benefit from a first tranche of institutional capital to help professionalize the business and there is no shortage of dry powder in the market to invest alongside these founders.”
Craig Castelli, Caber Hill Advisors: “It’s been a challenging year for M&A across the board. We really saw things come to a head with interest rates and wage inflation combined with a number of companies just not performing or living up to expectations. All of that creates a slowdown, but it’s been a bit bifurcated based on where a certain specialty is in the consolidation cycle, or what type of headlines have been out there. For example, the dental sector has seen a ton of private equity consolidation for years, but many portfolio companies are running into challenges in the last two years. On the other hand, Med SPA is the new darling of private equity. It’s been pretty white hot and unaffected by the issues that plague dental.”
Q: How are current economic conditions, such as interest rates and inflation, influencing strategies in the healthcare real estate market?
Jennifer Page, CARR: “By and large, a lot of people are slowing down a little bit; they’re a little timid and unsure. But we also have those who want to strike while the iron’s hot—they want to grow and get market share, and they’re moving forward. We’re seeing a little of both.”
Eugene Goldenberg, Edgemont Partners: “Everyone has been waiting for the Fed to cut rates. The recent 50 basis point cut was well anticipated, and many were hoping for it to happen earlier in the year. I don’t envision the floodgates opening just because of this cut, but there are expectations for more cuts before year-end and in 2025 as well. While the easing interest rate environment should help with the cost of capital, both traditional and specialty lenders are primed and ready to so support acquisition of new platform as well as debt/dividend recaps.”
Q: How do you see the role of private equity evolving in healthcare M&A going forward?
Jennifer Page, CARR: “Private equity is continuing to play a significant role. There are a lot of transactions happening with local agents that work with single dentists or doctors. But when looking at consolidation across medical, veterinary and dental verticals, it’s just growing and growing, with what appears to be unlimited potential.”
Eugene Goldenberg, Edgemont Partners: “I think we will continue to see significant involvement in healthcare from private equity. While the fundraising environment has been tough, healthcare-focused funds have raised capital at record pace over the last two to three years, and they will now need to deploy it. Even though we saw private equity’s share of healthcare M&A dip recently, we expect that to return to much more normalized levels in 2025/2026.”
Evan Goldstein, Bourne Partners: “Private equity investors are increasingly focused on becoming more than just a capital provider. They are leaning into their roles as a thought partner, bringing in experienced operating partners to enhance deal structuring and strategic planning and often serving as influential Board members. This focus on operational expertise has been impactful in ensuring successful transactions.”
Q: Were there any surprising standout sectors to you this year in healthcare M&A?
Scott Witter, Breakwater Advisers: ”While dental continues to dominate due to the sheer volume of practices, I’ve noticed a shift away from cardiology. Medical aesthetics, on the other hand, is gaining traction because it’s less regulated and more cash-driven. We’re seeing increased interest in sectors like orthopedics and ENT, with good activity levels in those areas.”
Eugene Goldenberg, Edgemont Partners: “People are betting on vanity. The med spa and aesthetic space continues to be all the rage, with new sponsors entering the market nearly every week. It feels very much like a land grab opportunity. There are approximately 20+ private equity platforms in this space, and it’s still early innings. Many firms are approaching this with a fairly aggressive de novo strategy, reminiscent of what we saw with urgent care and autism services 5- 10 years ago and continue to see today with ambulatory infusion or AICs.”
Maria Melone, Caber Hill Advisors: “In the last few years, there’s been a focus on specialty businesses in dental, which has been surprising to me because the number of specialists, like oral surgeons and periodontists, is a much smaller subset. The consolidation there is likely to happen more quickly, but I question what will happen to those platforms given the limited runway for acquisition growth.”
Craig Castelli, Caber Hill Advisors: “Med Spa was a surprise a year or two ago, but at this point, it’s no longer a secret… Pediatric medicine is something that has become pretty hot. Pediatricians don’t generate a lot of revenue per doctor compared to specialists, but there’s an opportunity to professionalize things, add different services and take on payment models that will boost revenue and build significant businesses. That’s another area to watch.”
Aaron Olson, Bourne Partners: “We’ve seen a lot of excitement in the post-acute space, whether it’s skilled nursing, hospice or home health. Less so on the traditional PPM side due to regulatory risk and the debt markets. In infusion, there’s been a lot of deal activity. This is a space that providers and investors should be looking at. We also see a resurgence in the autism space, as the macro factors are still strong, and the regulatory and reimbursement landscape looks stable.”
Q: How do you measure the success of the transactions you work on?
Scott Witter, Breakwater Advisers: ”My main goal is to source high-quality proprietary deal flow for my clients. Success for me is about providing a steady stream of valuable acquisition opportunities. While I can’t control how my clients price or navigate their investment processes, having a robust funnel of potential deals typically leads to successful transactions.”
Eugene Goldenberg, Edgemont Partners: “You could ask this question to three different people and likely get three different answers. In today’s market, getting a deal done altogether can be considered a success. Edgemont has been fortunate enough to have closed 11 transactions in the first nine month of the year and we are targeting to close another three to five deals in Q4. Irrespective if we are on the sell-side or buy-side, the goal is always to consummate a transaction that meets our client’s strategic and financial objectives. Ideally, both sides feel good about the deal — the seller feels they received a strong outcome, and the buyer believes they paid a fair price that enables them to build on a platform and accelerate growth to achieve a 3x+ return.”
Maria Melone, Caber Hill Advisors: “To me, success involves several elements: closing the transaction on terms acceptable to the seller, ensuring they have a role post-closing that they want and long-term satisfaction. Sellers often don’t think about their future with the organization, which can lead to disappointment if they don’t ask the right questions when choosing a partner or during the closing process.”
Aaron Olson, Bourne Partners: “Success in M&A can be defined differently for each stakeholder involved. For sellers, it often involves achieving strategic goals, hitting a valuation target, and finding the right growth partner for the future of the business. For buyers, success is about validating their thesis, getting a great return, and proving that the transaction leads to better outcomes for all involved, such as improved services and reduced costs.”
Q: How have recent regulatory changes impacted M&A activities in the healthcare sector?
Eugene Goldenberg, Edgemont Partners: “One of the biggest changes is the heightened scrutiny from the FTC, not only at the federal level, but also at the state level. A number of states have passed fairly onerous regulations regarding monitoring private equity M&A activity, often requiring extended notification periods or AG approval for certain type of transactions. For anyone looking to sell their business over the course of 2025, it’s important to be mindful of these new state regulations, as they may extend the timeframe between signing and closing.”
Maria Melone, Caber Hill Advisors: “In Massachusetts, as a result of the Steward Health Care bankruptcy, there’s likely going to be state legislation regarding private equity investment in healthcare businesses. It will be interesting to see how that plays out and if there is legislative action at the national level or by other states.”
Q: What emerging trends do you believe will drive M&A activity in healthcare over the next few years?
Eugene Goldenberg, Edgemont Partners: “We believe we will see a continuation of established trends, particularly focusing on companies that are on the right side of the cost curve. Capital will be drawn to companies that reduce costs, eliminate wasteful spending and provide quality care to patents in a cost-efficient and preferred setting. If companies can successfully address some of these pain points, whether for payers, health systems or consumers, this will be a resounding win for the healthcare eco-system and its participants, including the U.S. taxpayer.”
Maria Melone, Caber Hill Advisors: “Investment will be driven by the continued growth in healthcare. With more people needing care, the market will expand. Additionally, there’s a surge in technology creating new ways for patients to receive care, especially in areas like medical aesthetics, where new solutions emerge frequently. This growth will certainly continue to attract investor interest.”
Craig Castelli, Caber Hill Advisors: “GLP-1 weight loss drugs will have a big impact on healthcare. There’s potential for increased orthopedic surgeries as patients who were previously too obese for surgery now qualify after losing weight on these drugs. Orthopedic device manufacturers could benefit as well. However, the long-term effects of GLP-1s are still unknown, so it’s hard to predict whether this trend will ultimately be a net positive or negative for society. Either way, it will likely play a significant role in future M&A activity, from orthopedics to medical weight loss and wellness-focused businesses.”
Aaron Olson, Bourne Partners: “The personalization of healthcare is a major trend, with technology playing a massive role. We’re seeing more wearables that track personal health metrics, allowing insurance to be underwritten based on individual risk. Also, value-based care continues to evolve across multiple sectors, which will help drive improvements in costs, outcomes and sustainability.”
Evan Goldstein, Bourne Partners: “There’s a growing trend of merging technology providers with traditional in-person care, which has shown good outcomes. The efficacy of virtual care models that surfaced during COVID has led to a focus on quality providers, with an emphasis on outcomes measurement and KPIs.”
Q: What advice would you give to companies navigating the healthcare market?
Jennifer Page, CARR: “Hire a professional to help you navigate it. There are so many mistakes you can make. A lot of times, people focus solely on the lease rate without considering other factors that could put them in a bad position. Having representation should be a free service; real estate agents get paid just like residential agents do. The most important thing is to have someone who understands healthcare real estate looking out for your best interests.”
Scott Witter, Breakwater Advisers: “Focus on culture and integration, especially in sensitive sectors like behavioral health. Many M&A strategies falter during the integration phase, so it’s vital to invest resources into thoughtful integration planning. Successful M&A hinges on blending operations smoothly post-acquisition.”
Eugene Goldenberg, Edgemont Partners: “Nothing is a straight line in today’s market so be prepared to take some twists and turns on your way to achieving your goals and objectives. I really believe that surrounding yourself with experienced and knowledgeable advisors (financial, legal, regulatory, etc.) and having clear alignment between all the parties is crucial to having a successful outcome. It’s challenging to get a deal done in today’s market, so spend extra time preparing and doing all the necessary sell-side diligence and prep-work before coming to market. Once you’re in market – time is not your friend.”
Maria Melone, Caber Hill Advisors: “My biggest piece of advice is to work with a reputable advisor with relevant experience, and to start the conversation three to five years out. When clients come to us with a limited time frame, it’s challenging to position them effectively. Early planning allows us to identify improvements that could enhance their valuation and ensures the process is conducted thoroughly without rush.”
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