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Provident Healthcare Partners Provident Healthcare Partners

Q2 2025 Market Update

Provident Healthcare Partners
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Q2 2025 Market Update

The second quarter marked a deceleration in healthcare M&A, with transaction volume declining both quarter-over-quarter and year-over-year. The downshift reflects broader macroeconomic uncertainty stemming from speculation on tariffs, federal healthcare policy shifts signaled by legislative developments, inflationary economic pressures, and ongoing workforce shortages. This quarter served as a recalibration in market activity after a period of elevated deal flow.

While overall transaction count trended down, the healthcare IT and tech-enabled services sectors have remained highly-active. Private equity firms have turned to emerging spaces with differentiated value propositions to deploy capital while traditionally active sectors such as multisite provider services marked a two-year low in transaction volume. The downtrend in strategic add-on activity has been partially driven by a growing focus on organic growth initiatives given the reduced capital burden and continued shortage of quality add-on assets approaching the market.

Amid softer market conditions, Provident expects healthcare M&A activity
to improve throughout the second half of the year as investors get more
clarity on macroeconomic and policy-driven uncertainties.

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