Has UK healthcare deal momentum returned?
HBI sat down with Heligan Group’s Ramesh Jassal to assess the pace of UK healthcare deal activity in 2025, explore key sector trends, examine the ripple effects of US tariffs on UK assets, and identify the most attractive areas for investment in the months ahead.
After a slow 2024, optimism for a rebound in the UK healthcare M&A activity in 2025 was high. Investors and bankers were expecting to re-engage, expecting a rise in M&A and IPOs.
However, while deal momentum is steady and has remained on par with 2024 deal levels, it hasn’t reached the anticipated rebound, with macro uncertainties like tariffs, elections, and other global tensions causing investor caution, Ramesh Jassal, Partner ‑ Healthcare, Corporate Finance at investment bank Heligan Group, told HBI.
“That’s showing up in the numbers. In Q1, strategic buyers made up 83% of deals, rising to 93% in March. Private equity is still active, but most of the action is in bolt-ons to existing platforms. Those often get classified as trade deals, which masks how much PE is actually doing,” Jassal explained.
Though 2025 was expected to set records for PE exits in healthcare, few have materialised.
“A lot of sale processes are paused, waiting for the dust to settle. If things stabilise, we’ll likely see more movement in the second half of the year.”
“It’s definitely a buyer’s market. Trade buyers are driving the pace, new PE platforms are rare, and valuations have dipped a turn or two from their 2021–22 highs. But deals are still happening, just a bit more cautiously. Even the jump in capital gains tax to 24% hasn’t stopped sellers from moving forward,” Jassal added.
What are some notable sector trends?
Jassal told us that health and social care are currently dominating the UK deal landscape. In March, activity met expectations — particularly in social care, with multiple transactions in elderly care.
“That momentum in these sectors has continued. The market’s still highly fragmented — around 70% is older Tier 2 stock, where most consolidation is focused. The remaining 30% — newer builds — is drawing higher multiples. Tier 2 assets are typically trading at 5–7x EBITDA, and I expect that consolidation to carry on through 2025,” Jassal said.
He highlighted occupational health as a sector gaining serious traction — a trend echoed by many other healthcare advisers HBI has previously spoken to.
“There’s been a noticeable pickup in deal flow. A standout example is Optima Health, which was spun out of Marlowe and listed on AIM. We’ve also seen several deals in the past three months, signalling the sector is gearing up for consolidation.”
The UK’s occupational health landscape remains fragmented, but as Jassal pointed out, it is heading towards being dominated by the following players including Optima Health, Health Partners, Medigold Health, Handle group, PAM Group, and Kuro Health, to name a few.
“With limited organic growth, buy-and-build is the clear route to scale — acquiring customers and contracts, complimentary services, talent, and increasingly, tech and software to boost EBITDA. So yes, more activity to come here,” Jassal added.
Pharma and life sciences are picking up again
“In March, pharma and life sciences made up 28% of deal volume, with a clear spike in oncology-related transactions. That momentum’s continued into April,” Jassal pointed out.
Oncology, in particular, is getting a lot of attention, he said.
“Rising cancer rates are pushing demand for R&D and innovation, and investors are backing firms responding to that need.”
“The UK’s “golden triangle” — Oxford, Cambridge, London — remains a hotspot. Recent deals like Epsilogen’s acquisition of Tigatx show investors are serious about building platforms in oncology.”
Are 2024 trends continuing into 2025?
“Largely, yes — but with some shifts,” Jassal said.
Health and social care is still dominant. But medical devices and dentistry have slowed.
Ramesh Jassal
Explaining further, Jassal said:
“Big dental corporates like MyDentist are still performing well. But smaller groups, especially those reliant on NHS contracts, are under pressure. The main issue is UDA (Unit of Dental Activity) clawbacks. If practices don’t hit targets, they have to repay the shortfall, which is tough on fixed-cost models — especially post-Covid.”
So while large dental groups are stable, smaller NHS-focused ones can struggle.
Speaking to HBI in March, Alantra’s Managing Director Angel Manotas said that dental labs are gaining traction. Alantra recently acquired multiple dental laboratories in Spain. He also told us the dental laboratories are growing twice the rate of the overall dental industry.
Jassal acknowledged the increasing investor interest in the dental lab sector.
“It’s a highly fragmented market across Europe — for example there are about 1,800 small, mostly independent, labs in the UK.”
“In January, QPE acquired MediMatch, signaling strong interest in using this platform to consolidate the fragmented market. European players such as Corus, Minlay, Curaeos, and Liberty Dental Group (now owned by Oakley Capital) are also active, with some looking to consolidate and expand their presence in the UK.”
“The big question is whether larger dental groups will retain or divest in-house labs. Colosseum Dental (owned by Jacobs Holding) with Curaeos, for example, runs over 50 labs in a vertically integrated model. Others meanwhile, like European Dental Group, have divested labs. Whether others follow suit like Portman Dentex remains to be seen, and it’s a topic we’re exploring in an upcoming white paper. Over the next 12 months, we’ll likely see groups weighing up whether labs are core to their strategy or better spun out,” Jassal said.
Impact of recent US tariffs on UK healthcare M&A
In Q1, outbound UK healthcare deals made up around 15% of activity, while inbound foreign investment stood higher at 26%, showing sustained global interest in UK healthcare.
“The new US tariffs introduce uncertainty, but the recently signed UK–US agreement has kept rates relatively low, around 10%, which is still competitive globally,” Jassal said.
Ironically, this could boost the UK’s appeal. European investors may see the UK as a strategic gateway to the US market, offering reduced tariff exposure. Jassal describes this as a “Suez Canal” of healthcare investment — a strategic channel into the US.
“However, this depends on how US trade policy evolves. Rising tensions with China or other partners could disrupt supply chains and shift the landscape again. We’ll need to watch closely over the next six months before drawing firm conclusions,” Jassal added.
Investor focus shifting to consolidation over new platforms
Jassal also noted that financial investors are increasingly prioritising consolidation over the launch of new platforms.
Elaborating further, he said:
“Yes, to clarify: high-quality assets with strong organic growth or a clear buy-and-build strategy continue to attract private equity interest. Markets including Dental labs, Occupational Health, Elderly care homes, and specialist care.”
“Currently, private equity accounts for around 15–20% of overall deal activity. That figure is expected to rise once the macroeconomic environment — interest rates, trade policy, etc. — settles.”
“A key challenge is the lack of exits. Fundraising becomes harder without visible returns, creating a catch-22. As a result, many funds are holding assets longer and turning to bolt-ons to maintain momentum and create value.”
Which sectors of the UK healthcare market are most attractive for investment in the remainder of 2025?
According to Jassal, several areas of the UK healthcare market continue to attract strong investor interest:
- Health and social care, particularly specialist services
- Elderly care, with ongoing consolidation in care homes
- Dental labs, due to their fragmented structure
- High-end R&D and pharma/life sciences — though approached with some caution (influenced by factors such as potential changes in US policies and an increasing emphasis on well-being and preventative care)
- Nutritional supplements
- Heightened scrutiny of traditional pharmaceuticals and vaccines
- Predictive and preventative care approaches
- Mental health and occupational health
- Digital health platforms, AI diagnostics, and real-time patient engagement
- Interoperability and integrated care systems to improve outcomes
Concluding, Jassal said the investment landscape is evolving. It’s no longer solely about short-term gains or pill-based models: “The future of healthcare is personalised, preventative, and built for long-term impact.”
We would welcome your thoughts on this story. Email your views to Rakshitha Narasimhan or call 0207 183 3779.
