The word from the JP Morgan Healthcare Conference, which kicked off in San Francisco this week, is that M&A activity in the biopharma/life sciences space will likely grow in 2025 after a relative downturn in 2024. A more business-friendly administration in D.C. combined with an enormous amount of dry powder set to do deals, including some bigger billion-dollar-plus ones too.
Indeed, our own M&A data from LevinPro HC, which tracks all the healthcare services and tech deals, showed the 2024 total decline to just under 2,000 deals for the year, a 10% decrease from 2023’s activity and a 19% decrease from 2022’s. Dollar volume also dropped below $200 billion in total disclosed purchase prices, down from $254 billion in 2023. From the deal flow recorded by our healthcare team in just the first two weeks of the year, including dollar volume, it is looking like 2025 is on track for a banner year. Of course, it is still very early.
And what about the senior care M&A market, which ended 2024 on a high with more than 700 transactions, a record by far? Our own collection of announced deals in 2025 seems to already be keeping pace with 2024, and we expect to see more large, portfolio deals in the year as liquidity increases and borrowing costs hopefully ease. If prices rise, as well, then we may see more sellers tempted off the M&A sidelines and drive up the inventory sold. Breaking the 700-deal mark could be a tough task in 2025, but construction costs remain prohibitive for many projects, and as the industry is nearing its Golden Age, more investors will want to be a part of it through acquisition.
