Opportunities abound even as risks rise: M&A trends in healthcare

After record healthcare transaction volumes in 2021, the pace of M&A returned to previous levels, averaging about 400 per quarter. We expect industry leaders and PE firms to keep making hundreds of deals per quarter into 2023, including some large ones. Most will tread cautiously, however, as they navigate the threat of recession, geopolitical turmoil, supply chain challenges, labor shortages, and higher interest rates that could affect company operating results and reduce buyers’ leverage.

In this paper, we review healthcare dealmaking in Q3’22 by sector, including the most notable transactions, as well as trends in strategic and PE investing. After a deep dive into the risks and rewards of divestitures, we share our outlook on the next several quarters, and recommend three steps that industry leaders should consider now.