Key Takeaways
- • PESP tracked 1,049 US private equity-backed healthcare deals in 2024, a 7.6% decline from 1,135 in 2023, but activity continued at a steady pace despite regulatory scrutiny and high interest rates.
- • Add-on acquisitions made up 621 of the 1,049 deals (nearly 60%), with 166 buyouts and 262 growth/expansion investments rounding out the total across 383 platform companies.
- • At least 16 PE firms completed 10 or more healthcare deals in 2024; Latticework Capital Management was most active with 27 deals.
- • Dental care was the busiest subsector with 161 deals, up 10.3% from 2023, and MB2 Dental (Warburg Pincus and Charlesbank) led platform add-on activity with 20 acquisitions.
- • PESP urges federal and state policymakers to strengthen oversight of healthcare M&A, citing 'stealth consolidation' risks and a January 15, 2025 HHS report on healthcare consolidation.
Summary
Private equity firms maintained a steady pace of US healthcare investment in 2024, according to the Private Equity Stakeholder Project (PESP), which tracks PE-backed healthcare deals monthly. PESP identified 1,049 unique deals in 2024, comprising 166 leveraged buyouts, 262 growth/expansion investments and 621 add-on acquisitions to 383 unique platform companies. The deals involved at least 676 private equity firms, business development companies, venture capital firms, private credit funds and other investors. The total represents a 7.6% decrease from the 1,135 deals PESP tracked in 2023. Monthly activity averaged 87 deals, peaking in January (111), June (104) and April (100).
Add-on acquisitions, in which a PE-backed platform company acquires smaller companies, accounted for nearly 60% of tracked activity. PESP notes that this strategy can keep deals below the Hart-Scott-Rodino reporting threshold, which was about $119.5 million in 2024, allowing serial acquisitions to avoid FTC review. At least 13 platforms completed five or more add-ons. Over half of the most active platforms were dental companies. MB2 Dental, owned by Warburg Pincus and Charlesbank Capital Partners, led with 20 add-ons, followed by Specialized Dental Partners (Quad-C Management) with 18 and SALT Dental Collective (Latticework Capital Management and Resolute Capital Partners) with 14. Latticework and Resolute also own Beacon Behavioral Partners, which made at least 11 add-on acquisitions.
PESP cites Bain & Company data showing that 2024 was the second-highest year on record for global PE healthcare deal value, at approximately $115 billion, with North America accounting for 65%. US healthcare services deal volume remained subdued relative to its 2021 peak. PwC reported a 9% decline in healthcare services deals from 2023 through November 2024, though volume remained 70% above pre-COVID levels. PESP attributes the slowdown largely to high interest rates. Analysts expect a healthcare dealmaking rebound in 2025, citing falling rates, substantial dry powder and an anticipated more favorable federal stance toward PE.
Regulatory scrutiny intensified in 2024. On January 15, 2025, HHS released a report on healthcare consolidation, prepared with the FTC and DOJ, which highlighted the influx of private equity and other private investors into the sector. PESP argues that PE acquisitions have contributed to consolidation linked to higher prices across subsectors, and cites a 2023 peer-reviewed study associating PE acquisition of hospitals with a 25.4% increase in hospital-acquired conditions. PESP recommends that state and federal policymakers update laws to increase oversight of healthcare mergers and acquisitions.
Add-on acquisitions, in which a PE-backed platform company acquires smaller companies, accounted for nearly 60% of tracked activity. PESP notes that this strategy can keep deals below the Hart-Scott-Rodino reporting threshold, which was about $119.5 million in 2024, allowing serial acquisitions to avoid FTC review. At least 13 platforms completed five or more add-ons. Over half of the most active platforms were dental companies. MB2 Dental, owned by Warburg Pincus and Charlesbank Capital Partners, led with 20 add-ons, followed by Specialized Dental Partners (Quad-C Management) with 18 and SALT Dental Collective (Latticework Capital Management and Resolute Capital Partners) with 14. Latticework and Resolute also own Beacon Behavioral Partners, which made at least 11 add-on acquisitions.
PESP cites Bain & Company data showing that 2024 was the second-highest year on record for global PE healthcare deal value, at approximately $115 billion, with North America accounting for 65%. US healthcare services deal volume remained subdued relative to its 2021 peak. PwC reported a 9% decline in healthcare services deals from 2023 through November 2024, though volume remained 70% above pre-COVID levels. PESP attributes the slowdown largely to high interest rates. Analysts expect a healthcare dealmaking rebound in 2025, citing falling rates, substantial dry powder and an anticipated more favorable federal stance toward PE.
Regulatory scrutiny intensified in 2024. On January 15, 2025, HHS released a report on healthcare consolidation, prepared with the FTC and DOJ, which highlighted the influx of private equity and other private investors into the sector. PESP argues that PE acquisitions have contributed to consolidation linked to higher prices across subsectors, and cites a 2023 peer-reviewed study associating PE acquisition of hospitals with a 25.4% increase in hospital-acquired conditions. PESP recommends that state and federal policymakers update laws to increase oversight of healthcare mergers and acquisitions.
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