Healthcare PE Deals Slow as Tariffs Dampen Investor Appetite, Bain Report Shows

What's New

According to Bain & Company's Healthcare Private Equity 2025 Midyear Update, global healthcare buyout deal value fell slightly below 2024 levels on an annualized basis in the first half of 2025. The second quarter saw particularly pronounced declines in medical technology and biopharma transactions, with tariff concerns and policy uncertainty giving investors pause across most regions.

Why It Matters

This recalibration reflects broader market caution as private equity firms navigate policy headwinds while simultaneously pursuing AI-enabled healthcare IT assets. The mixed regional performance signals that dealmakers are becoming increasingly selective, focusing on assets with regulatory insulation and clear technology differentiation rather than pursuing volume-driven strategies.

Big Picture Drivers

• Policy uncertainty: Tariff discussions and potential healthcare policy shifts are creating investor hesitation in deal execution

• AI acceleration: Healthcare IT companies are commanding premium valuations due to artificial intelligence applications and integration potential

• Regional divergence: India's provider consolidation and Japan's corporate carve-outs are driving Asia-Pacific activity while North America weakens

• Flight to quality: Investors are prioritizing assets insulated from public policy risks over traditional healthcare plays

• Dry powder deployment: Abundant capital reserves remain available for deployment once market conditions stabilize

By The Numbers

• -27%: Decline in healthcare buyout deal count year-over-year in Q2 2025

• $17B: Total deal value in India during first half 2025, leading Asia-Pacific activity

• 179: Number of healthcare deals completed in Greater China, highest by volume

• $11B: Deal value in Japan, driven by large corporate carve-out transactions

• 6 quarters: Duration of steady European dealmaking performance despite global volatility

Key Trends to Watch

• Healthcare IT surge continues as investors seek technology-enabled assets with AI integration capabilities and policy protection.

• India's healthcare provider consolidation accelerates with major institutional deals reshaping the market landscape.

• European stability emerges as a relative safe haven for consistent deal execution amid global uncertainty.

• Large delayed transactions prepare to return to market as policy clarity improves and valuations stabilize.

The Wrap Despite first-half headwinds, Bain expects third-quarter optimism based on large deals already in progress and significant dry powder waiting for deployment. The market is fundamentally recalibrating toward higher-quality assets with clear technology advantages and regulatory protection, suggesting a more selective but potentially more profitable investment environment ahead.

Read Full Report Bain & Company Healthcare Private Equity Report