Fewer Deals, Bigger Checks
The market is concentrating, not accelerating: US deal count is down (8.0% overall, 15.8% in healthcare services) while announced value has more than doubled, so fewer processes are clearing but the ones that do are larger. Strategic buyers dominate the top of the market by paying with stock, while private equity has stepped back from megadeals but still drives middle-market volume. Healthcare’s 12.6x headline multiple reflects pharma and biotech, not services, which are seeing lower volume on flat dollars.
Highlights from the report:
- Concentration, not acceleration: US deal count is down 8.0% YTD while announced value has more than doubled — fewer processes are clearing, but the ones that do are much larger, backed by deeper capital.
- Strategics own the top, sponsors own the middle: Stock-funded corporate megadeals (e.g., Dominion Energy, Cursor) drove Q2 activity at the top of the market, while private equity held a stable 60%+ share of healthcare services deal count in the middle market, where cash and debt — not stock — remain the currency.
- Healthcare’s headline multiple is misleading for services owners: The sector’s 12.6x median is driven by pharma/biotech patent-cliff deals; US healthcare services deal count is actually down 15.8% YTD on flat dollars, consolidating into fewer, larger transactions.
- Structure is absorbing the valuation gap: Nearly 54% of middle-market deals now include an earnout or seller financing (vs. a 39% long-run average), meaning headline multiples increasingly overstate cash received at close.
- Scale is the biggest value lever: Healthcare services businesses at $10–25M EV average 6.5x vs. 10.5x at $250–500M — a four-turn spread wider than the entire sector’s premium — and much of that gap (payor concentration, owner dependence, reporting quality, workforce durability) is addressable before a sale process begins.
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