By Lou Sokolovskiy
While global healthcare megadeals still dominate the headlines, a potentially more transformative shift is happening in the U.S. lower- and middle-market space. This segment is drawing acquirers and investors with its blend of favorable credit, deregulatory momentum, demographic shifts, and tech acceleration. In particular, the following six sectors have seen increased M&A activity in recent months – some at levels not witnessed in years—and here is why each one matters.
1. Behavioral Health: Diagnosis, Deals, and Digital Delivery
In Q1 2025, U.S. behavioral health deal volume surged by 35% year-over-year, with autism-related transactions doubling to their highest quarterly level since 2020. The Braff Group reported 47 total transactions- 12 in the autism and intellectual/developmental disabilities (I/DD) sector, and 34 in other healthcare sectors. This marks the highest number of autism/I/DD deals in a single quarter since 2021.
In June, a PwC report said that “Investor interest in autism, addiction and outpatient psych platforms has reignited.”
On Applied Behavior Analysis, Kevin Taggart of Mertz Taggart wrote recently: “The dust has seemed to settle on that over the last six months or so, and so now we’re seeing a lot of groups asking for ABA businesses. That’s a positive.”
2. Home-Based Care: Aging in Place, Tech in Demand
With demographic trends pointing toward one in five Americans being 65 or older by 2030, the home health and hospice sectors are experiencing heightened buyer interest.
In June, a PwC’s healthcare M&A report noted that ambulatory care—including home infusion and surgical center deals—accounted for 454 transactions and over $31 billion in value over the past 12 months.
“The ever-increasing emphasis on value-based risk-sharing and other unique payment models may also influence growth opportunities for the [healthcare] provider sector in 2025,” read an extensive Reuters analysis in January.
3. AI & Digital Health: Essential, Not Optional
By mid-2025, AI and digital tools had moved from experimental add-ons to deal-deciding assets in lower- and middle-market healthcare M&A.
According to PwC’s latest U.S. midyear Health Services Deals Outlook:
“AI is on every company’s agenda and many organizations claim significant ROI from healthcare AI but lack data to illustrate the case. Still, pilots in areas like revenue cycle and diagnostics are receiving concentrated investments and warrant attention.”
This signals a clear shift: dealmakers are no longer satisfied with piecemeal tech. Instead, they’re prioritizing targets equipped with scalable AI capabilities—whether for automating billing, accelerating diagnostic insights, or improving clinical workflows. Several media reports suggest that the U.S. market is seeing acquisition multiples strongly tied to the robustness of a target’s tech stack: platforms embedded with AI, telehealth readiness, and wearable data integration are commanding premium valuations.
4. MedSpas & Aesthetics: Boutique to Buyout
MedSpas and aesthetic clinics in the U.S. have rapidly transformed from niche services into prime consolidation targets. A recent Scope Research report showed midsized MedSpas (with revenues of $5–20 million) fetching 5–8× EBITDA, while large regional chains with strong branding and tech appeal can command 7–12× EBITDA—and in rare cases, up to 20× EBITDA, particularly when linked to cutting-edge technology or proprietary products.
Agenda Health, an M&A advisory firm specializing in the sector, adds context: “Being willing to pay a premium for the right brand can make all the difference… this space is so reputation‑centric.”
5. Cybersecurity: The Non-Negotiable Deal-Breaker
In today’s U.S. healthcare M&A landscape, cybersecurity diligence is no longer a checkbox—it’s a fundamental requirement. In a January report titled “Invisible threats: Why cybersecurity due diligence is nonnegotiable in M&A,” Reuters repored that “high-profile cyberattacks have exposed vulnerabilities in even well-established organizations, leading to significant financial losses, reputational damage, legal liabilities, and, in some cases, deal failures.”An Oliver Wyman report reinforces this urgency in healthcare M&A: “The likelihood of a [cyber] breach doubles the year before and the year after a hospital merger closes.”
6. Retail & Preventive Health: Wellness Takes Center Stage
Consumer-focused and preventive healthcare providers are emerging as keenly sought targets. PwC’s U.S. Health Services 2025 Mid‑Year Outlook reports 413 physician-group transactions worth $11.3 billion in the trailing twelve months
This trend is reinforced further by new regulatory dynamics. In June 2025, a U.S. Supreme Court decision confirmed that insurers must maintain no-cost preventive services—such as cancer screenings and immunizations—under the Affordable Care Act, enhancing revenue stability for preventive-care platforms.
Meanwhile, the “food-as-medicine” movement has moved beyond pilot programs. These combined forces are fueling deal flow in three emerging sub-sectors:
- Virtual-first primary care: Subscription-based models that emphasize preventive check-ins and remote management.
- Nutrition & food-as-medicine platforms: App- and clinician-driven services targeting chronic conditions like diabetes and hypertension.
- Wellness-integrated practices: Clinics that blend conventional medical treatment with lifestyle-focused services—such as stress reduction, fitness guidance, and nutrition.
Recently, at Opus Connect, we reported on PwC’s mid-year 2025 TMT M&A outlook, highlighting how AI is driving a shift toward fewer but larger, more strategic deals across the technology, media, and telecom sectors. You can find that story here.
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Aug. 2025
