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5 Mergers and Acquisitions Trends in the Healthcare Industry

June 8, 2023

Mergers and acquisitions within the healthcare industry were largely unaffected by the market volatility of 2022, with mega deals closing, such as Gilead buying Mirobio for $405M and AbbVie acquiring DJS Antibodies for $255M.

With “Big Pharma” already sitting on $1TN to invest – expected to grow to $2.9TN by 2029 – it’s highly unlikely deal-making activity in the healthcare M&A space will slow down over the coming years.

So, as we hit mid-2023, we take a look at five noteworthy trends in the world of healthcare mergers and acquisitions.

Healthcare M&A Trend 1: Increased Focus on Digital Health and Telemedicine

With the COVID-19 pandemic accelerating the adoption of telemedicine and digital health solutions, it’s no surprise that this trend has mushroomed in the healthcare industry.

Mergers and acquisitions in the healthcare space will likely continue to focus on companies that offer innovative digital health platforms, remote monitoring solutions, and telemedicine services. This will allow healthcare providers to offer more convenient and accessible care to patients, while also improving efficiency and reducing costs.

Healthcare M&A Trend 2: Consolidation of Smaller Healthcare Providers

As the healthcare industry continues to consolidate, smaller providers are at risk of being left behind. In order to stay competitive, many smaller providers are choosing to merge with larger healthcare systems or partner with other providers to offer a wider range of services.

This trend is expected to continue for Q3 and Q4 of 2023, as smaller providers seek to remain relevant in an increasingly competitive market.

Healthcare M&A Trend 3: Expansion of Healthcare Services into New Markets

One of the top trends in healthcare mergers and acquisitions to continue into 2023 is the expansion of healthcare services into new markets. This includes both geographic expansion and expansion into new service lines.

The reason for this is straightforward: healthcare providers are looking to grow their patient base and increase revenue by offering new services in areas where there is high demand. This trend is driven by the need to stay competitive in a rapidly changing healthcare landscape, as well as the desire to provide patients with more comprehensive care.

Healthcare M&A Trend 4: Collaboration Between Healthcare and Technology Companies

Another major healthcare mergers and acquisitions trend that has accelerated in 2023 is the collaboration between healthcare and technology companies.

With the rise of digital health and telemedicine, healthcare providers are looking to partner with technology companies to improve patient care and outcomes. This includes the development of new technologies and platforms for remote patient monitoring, virtual consultations, and data analytics. By combining their expertise, healthcare and technology companies can create innovative solutions that improve the quality and accessibility of healthcare for patients.

Healthcare M&A Trend 5: Emphasis on Value-Based Care and Cost Savings

Finally, we are seeing continued emphasis on value-based care and cost savings within the healthcare M&A market. The reason for this is that, with rising healthcare costs and the need to improve patient outcomes, healthcare providers are looking for ways to streamline operations and reduce expenses. This includes mergers and acquisitions that allow for greater efficiency and economies of scale.

By consolidating resources and eliminating redundancies, healthcare organizations can provide better care at a lower cost. Additionally, mergers and acquisitions can help healthcare providers negotiate better contracts with insurers and suppliers, further reducing costs.

Woodbridge International specializes in mid-sized mergers and acquisitions across a variety of industries, including healthcare. If your company has an annual turnover of $5M plus, contact us for a free valuation.