Healthcare Trends & Transactions Q3 2025

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Though the long-term impact is yet to be seen, those wary of the changes to Medicaid eligibility and the Affordable Care Act under the One Big Beautiful Bill Act, signed into law on July 4, are surely relieved to see there was an uptick in deal activity in the healthcare mergers and acquisitions (M&A) market from Q2 to Q3 2025. The physician practice management (PPM) sector reported solid numbers, with deal volume reaching a quarterly high for 2025, fueled by both private equity (PE) and institutional investment. Meanwhile, for certain sectors, it was not the volume of deals but the size of the deals—and the parties involved—that grabbed folks' attention. For example, the $10 billion sale of Walgreens Boots Alliance (Nasdaq: WBA) to Sycamore Partners certainly made waves. This report provides an overview of some of the notable transactions in these and other healthcare sectors.

Physician Practice Management

Despite sentiments that PE may have cooled on the sector, the PPM sector saw its strongest deal flow year to date, with LevinPro reporting approximately 130 deal announcements in Q3 alone, with approximately 367 total PPM deals since January. PE remains the dominant force driving in deal volume, although major healthcare corporations and other strategic acquirers were also active participants in the market. Through September, PE firms (or their portfolio companies) announced a total of 507 healthcare transactions, 35% of which were in the PPM sector.

August saw significant transactions involving two of the nation's largest healthcare organizations. According to its August 13 press release, Optum, a subsidiary of UnitedHealth (NYSE: UNH) and one of the nation's largest practice organizations in the United States, acquired Holston Medical Group, a 200-provider multi-specialty practice with more than 70 locations throughout Northeast Tennessee and Southwest Virginia. Meanwhile, Cardinal Health (NYSE: CAH), a global healthcare conglomerate, announced that its subsidiary, The Specialty Alliance, purchased Solaris Health for a reported $1.9 billion. Solaris Health (formerly backed by Lee Equity Partners) is one of the largest urology-based management services organizations in the United States, with locations across 14 states. This continues a busy acquisition season for Cardinal Health, which began with its acquisition of The Specialty Alliance from Bain Capital in January 2024 and continuing with the $2.8 billion acquisition of the gastroenterology platform GI Alliance in November 2024.

The dental space continues to outpace all other sectors, with LevinPro reporting that nearly 53% of Q3 transactions in the PPM sector were in the dental space, with approximately 183 reported transactions as of the end of September. Imagen Dental Partners, an Arizona-based dental services organization (DSO), continued its Q2 run and expanded into Washington with its acquisition of Seattle-based Aesthetica Contemporary Dentistry in July and Kentucky-based Toothologie in August. Imagen now supports more than 100 practices across 17 states. On August 18, the DSO Sage Dental announced its latest expansion into South Florida with the acquisition of Fort Lauderdale-based The Dental Group. Sage Dental now supports around 140 practices. On September 10, MB2 Dental Solutions (backed by Charlesbank Capital Partners and Warburg Pincus) announced its 800th practice location with its purchase of The Smile Lodge, a New York-based practice featuring 22 doctors, 200 employees and a reported 65,000 patients. As of the end of Q3, MB2 partnered with approximately 47 practices in 2025.

Hospitals and health systems were among active physician practice buyers in Q3. In July, AdventHealth, one of the largest faith-based health systems in the United States, announced it acquired Bond Clinic, a physician group encompassing 90 providers among 28 specialties in Polk County, Florida. On September 2, HonorHealth, an Arizona-based health system, signed an agreement to acquire Phoenix-based Evernorth Care Group and its 18 clinics from Cigna (NYSE: CI). The transaction is expected to close in January 2026.

Clinical Research Organizations

In Q3, the clinical research market saw a slight downtick in deal volume. Nevertheless, according to Reuters, with big pharma ramping up research spending on new therapies and artificial intelligence speeding up drug development, PE firms are predicting this will increase demand for clinical trials, which we predict will only increase the consolidation of clinical research companies and multiply the volume of clinical trial sites.

On July 15, Evestia Clinical (backed by Kester Capital and based in the United Kingdom) announced its merger with Atlantic Research Group (ARG), a U.S.-based clinical research organization (CRO). ARG broadens Evestia's service offerings by adding expertise in neurology and late-stage clinical trial services. ARG's clients will gain access to Evestia's global presence and enhanced focus on rare diseases.

On August 14, PE firm THL Partners announced its definitive agreement to acquire Headlands Research, a multi-national network of clinical trial sites that conducts trials in central nervous system disorders, vaccines, and metabolic diseases. According to Reuters, THL will buy a majority stake in Headlands from KKR, with the deal valued at roughly $600 million. For over 25 years, THL has been active in the pharma space, investing in companies like Fisher Scientific, PCI Pharma Services, and Syneos Health. Together, THL and Headlands plan to expand Headland's technology and infrastructure for continued delivery of clinical trial data for pharmaceutical and biotech sponsors and expansion of clinical trial access to underrepresented populations. This transaction is anticipated to close in 2025.

On August 27, Kemin Industries, a global ingredient manufacturer, announced its acquisition of Hennessy Research Associates, which specializes in the research and development of vaccines for infectious diseases of animals. Hennessy Research Associates will function within Kemin as a contract research organization, contract development and manufacturing organization, and contract manufacturer. According to the parties' press release, the acquisition will strengthen Kemin's animal vaccines offerings and its position in the animal health market.

On September 30, Rovia Clinical Research (backed by Gauge Capital, announced that it acquired StudyMetrix Research and Coastal Research Institute (CRI)) expanding its network of sites. StudyMetrix and CRI will strengthen Rovia's capabilities in the obesity, hepatology, gastroenterology, pain, and internal medicine areas.

All in all, Q3 saw notable strategic acquisitions aimed at the expansion of platforms' service offerings and market reach.

Ambulatory Surgery Centers

The ambulatory surgery center (ASC) sector remained active in Q3, including in several cases the acquisition of ASCs attached to PPM acquisitions. This is highlighted by SCA Health (Optum's ASC arm) confirming in August that, earlier in the year, it acquired U.S. Digestive Health, a Northeast-based ASC and physician practice organization employing 150 physicians and operating more than 20 ASCs, from Amulet Capital Partners. SCA Health now supports a network of over 300 ASCs across 35 states, and some commentators suggest the deal signals another significant shift in GI consolidation.

In the month of August, we saw some PE investment in the ASC sector. On August 1, ophthalmology platform EyeSouth Partners (backed by Olympus Partners) acquired Sunvera Group, a Michigan-based management services organization operating 15 practices and 4 ASCs across Michigan, Ohio and Pennsylvania. And on August 13, Great Hill Partners announced its acquisition of Blue Cloud Pediatric Surgery Centers, a Texas-based operator of pediatric ASCs, from The Rise Fund (backed by TPG Capital). Blue Cloud operates 32 facilities across twelve states and sees more than 60,000 patients each year.

While PE investment will no doubt continue in this space, they certainly are not the only ones looking for opportunities to invest in outpatient settings. Indeed, as of mid-August, health systems had announced more than 30 transactions in the physician and ASC space since the beginning of the year—including, notably, Ascension's pending acquisition of AmSurg and its 250 centers for $3.9 billion. August also saw ThedaCare, an affiliate of Froedtert & the Medical College of Wisconsin, add not only the largest independent urology practice to its portfolio, but it also became the majority member of the Wisconsin Institute of Surgical Excellence, an ambulatory surgery center.

Hospitals & Health Systems

The hospital and health system space had a slow start in 2025 compared to previous years. Some have cited economic uncertainty and the potential for policy changes affecting healthcare as reasons for the reduced deal activity in the sector through the first half of the year. However, while some buyers remained skeptical in Q3—for example, Insight Health System walked away from negotiations on a proposed transaction with California-based Hazel Hawkins Memorial Hospital, citing uncertainty around the recently signed One Big Beautiful Bill Act—LevinPro reported that deal volume in the hospital sector actually rose slightly during Q3.

Many national health systems continue to deploy divestiture strategies, shedding underperforming assets to help overcome operating challenges. In Q3, for example, Tenor Health Foundation signed a letter of intent to acquire Commonwealth Health, a three-hospital system in Pennsylvania, from Community Health Systems (NYSE: CYH). The sale would mark CHS's exit from the Pennsylvania market and add to the 39 hospital divestitures of CHS since 2020. On October 24, the parties announced that they have entered into a definitive agreement regarding the transaction and expect it to close in Q4. Meanwhile, Ascension sold off Ascension Southwest Michigan, a regional subsidiary, to Beacon Health System. Trinity Health also divested its 49% ownership stake in a joint venture with Emory Healthcare for St. Joseph's Health System.

Other large health systems were involved in acquisitions in Q3. Atrium Health Wake Forest Baptist, which is part of Advocate Health, the third-largest nonprofit health system in the country, acquired and committed to investing an additional $100 million into Hugh Chatham Health in Elkin, North Carolina. Memphis, Tennessee-based Baptist Memorial Health Care signed a definitive agreement to purchase 96-bed OCH Regional Medical Center in Starkville, Mississippi, from the Oktibbeha County Board of Supervisors for $55 million. The sale would mark Baptist Memorial's 25th hospital.

Perhaps the most active players in the health systems sector during Q3 were regional health systems aiming to expand their geographic footprint. For example, in July, California-based Astrana Health acquired California-based Prospect Health for $708 million. The acquisition comes after Prospect sought Chapter 11 protection earlier this year and has been offloading many of its hospitals. Pennsylvania-based St. Luke's University Health Network acquired Pennsylvania-based Grand View Health, which is St. Luke's 16th campus. Later in Q3, Virtua Health and ChristianaCare signed a letter of intent to form a regional nonprofit health system. The combined system would provide services across New Jersey, Delaware, Pennsylvania, and Maryland. Connecticut-based Hartford HealthCare, a seven-hospital system, announced in September that it had submitted a bid to acquire Manchester Memorial Hospital and Rockville General Hospital, both located in Connecticut, for $86 million from Prospect Medical Properties as part of Prospect Medical's bankruptcy proceeding. On October 18, the federal bankruptcy court overseeing the proceedings named Hartford HealthCare the auction winner—though the parties must still obtain a certificate of need before they can close the transaction. Effective September 1, Iowa-based UnityPoint Health acquired MercyOne Siouxland Medical Center, with the facility to now be called UnityPoint Health – St. Luke's – Downtown. Ohio-based TriHealth also completed its acquisition of Clinton Memorial Hospital, which is now TriHealth's sixth acute care hospital and will serve as a hub for the system's specialized services, including women's health, cancer, heart and vascular, neurosciences and stroke care.

Finally, academic medical centers also showed signs of activity. For example, in July, University Health, which is in the midst of a $1.5 billion strategic expansion, announced that it will acquire CHRISTUS Health's former Santa Rosa Hospital – Medical Center for $71 million. On September 12, New Hampshire-based Littleton Regional Healthcare also signed a letter of intent with Dartmouth Health to become a member of the system. Brown Health Medical Group, which is part of Brown University Health System, and Brown Physicians are moving forward with a merger following the completion of reviews by the Federal Trade Commission and the Rhode Island Attorney General.

Home Health, Hospice Care & Personal Care Services

The home health and hospice sector saw a modest decline in deal activity since Q2, as the industry faced changes in Medicare reimbursement rates and ongoing regulatory uncertainty.

The most notable transaction in the space occurred in August when, following two years of regulatory scrutiny, UnitedHealth closed its $3.3 billion acquisition of Amedisys, a provider of home health and hospice services. The Department of Justice sued to block the transaction in November 2024, and the parties recently reached a settlement requiring that Amedisys and United sell over 160 of its home health and hospice locations; such facilities accounted for an estimated $528 million in annual revenue. The acquisition will greatly strengthen United's position in the home health and hospice industry, with Amedisys providing services across 38 states. Amedisys will operate under United's Optum umbrella.

Despite regulatory and reimbursement headwinds, several transactions were announced during the quarter, including The Pennant Group's (Nasdaq: PNTG) acquisitions of GrandCare Health Services, which provides services in several counties in California, and Healing Hearts Home Health, a home care services provider in Wyoming. In the hospice sector, LifeCare Home Health announced in September its acquisition of St. Gabriel's Hospice & Palliative Care, a hospice care provider serving approximately 300 patients in Texas, and BaneCare Management, a senior care services provider in Massachusetts, announced its acquisition of Longwood Hospice.

In the personal care services space, Addus HomeCare (Nasdaq: ADUS), one of the nation's leading providers of personal home care and support services, acquired Helping Hands Home Care Services, Inc., a Pennsylvania home care provider, for an estimated $21.2 million.

Digital Health & Health Information Technology

Despite a slow July, the digital health and health information technology sector had a busy third quarter. Of note in July was Samsung's acquisition of Xealth, a healthcare integration platform. In August, Doximity, a networking service for medical professionals, acquired Pathway. Trella Health, a leading healthcare CRM provider, acquired Repisodic, a hospital discharge automation platform. Also in August, CareCloud (Nasdaq: CCLD, CCLDO) announced its acquisition of the assets of Medsphere Systems, a leading provider of enterprise inpatient and ambulatory health IT solutions to more than 600 clients in all 50 U.S. states and territories. Following its acquisition of Medsphere, CareCloud announced in late September that it would acquire the MAP App, a leading hospital benchmarking tool for measuring RCM performance, from the Healthcare Financial Management Association (HFMA). According to the press release, the transaction was scheduled to close in October. In late August, Advent International, a global PE firm with nearly $100 billion in assets under management, announced that it signed a definitive agreement to acquire PatientPoint from an investor group L Catterton and Littlejohn & Co. PatientPoint operates a nationwide network of digital devices in 30,000 physician practices for over 125,000 providers. The transaction is expected to close in the fourth quarter.

In September, PurpleLab, a healthcare analytics company, acquired KAID Health, an AI-powered clinical analytics and care management company, creating a combined platform that will provide real-time analytics and data extraction to payers, accountable care organizations (ACOs), provider groups, and life sciences companies. Additionally, Glooko, a provider of remote patient monitoring and digital health services for patients with diabetes, acquired Monarch Medical Technologies, which developed a software platform for inpatient insulin dosing and glycemic management. Finally, in late September, Premier (Nasdaq: PINC) entered into a definitive agreement to be acquired and taken private by an affiliate of Patient Square Capital. The transaction values the Company at $2.6 billion and is expected to close in early 2026. Premier is a provider of data analytics, supply chain solutions, and consulting services to providers, suppliers, and payers, as well as policymakers within the healthcare space.

Behavioral Health

The behavioral health M&A market has remained active in Q3, driven by activity in the mental health and substance and use subsectors, and we expect robust transaction activity in the space to continue throughout the rest of 2025.

Several notable transactions in the sector occurred in Q3. In July, Maryland-based Orchard Mental Health Group (backed by The Graham Group) acquired Maryland Counseling Associates. The combined organization's services include individual, family, and group therapy, comprehensive psychological testing, and medication management. Minnesota-based Nystrom & Associates, backed by Nautic Partners, acquired Minnesota-based Ellie Mental Health's Minnesota operations, together creating one of the largest behavioral health networks in the region operating 84 locations across five states. The organizations provide therapy, psychiatry, substance use treatment and specialist programs for individuals, couples and families. In July, MindSpa Psychiatry announced its merger with Joseph Lee Counseling, a provider of psychotherapy and mental wellness services. The new partnership will operate under a new name: MindSpa Therapy. Two of the most influential nonprofit behavioral health providers, Brightli and Centerstone, have entered into a letter of intent to merge and create a unified organization. The combined organization will become the largest nonprofit behavioral healthcare provider in the U.S., providing mental health and substance use disorder services, with annual revenues expected to exceed $1 billion, and the transaction is anticipated to close in Q4. In late September, PAX Health (a behavioral healthcare company backed by HCAP Partners) announced 0that it acquired Neuropsychology and Counseling Associates, an outpatient mental health practice in New Jersey. BrentCare Behavioral Health also completed its acquisition of Modern Recovery Network, making it a national leader in adolescent behavioral health.

In the substance use space, in July, Crossroads Treatment Centers (backed by Revelstoke Partners and CDPQ) acquired Pennsylvania-based Family Health Services, which provides outpatient addiction treatment services. Crossroads now operates over 100 centers across nine states. Alabama-based Bradford Health Services (backed by Lee Equity) also acquired three Texas-based substance use disorder treatment clinics – the Last Resort Recovery Center, Crestone Wellness and The Chapter House.

Other notable transactions in Q3 involved non-provider entities that support and enhance behavioral healthcare. In July, private equity firm NexPhase Capital announced its acquisition of Empower Community Care, a global behavioral health enablement platform. Empower provides its customers with infrastructure and support to scale care through its proprietary, evidence-based services and software. Additionally, in August, Cerebral acquired Resilience Lab, a New York-based behavioral health company, in hopes of establishing a more comprehensive mental health delivery system, serving as a single point of contact for medication management and therapy providers.

Managed Care and Value-Based Care

The managed care and value-based care sector saw steady deal activity in the third quarter. In July, Nordic Capital Advisors, a European PE firm, acquired Boston-based Arcadia Solutions, a healthcare data analytics company that partners with health systems, payers, and life sciences companies to provide data aggregation, care management, and risk adjustment services. Humana (NYSE: HUM), through its subsidiary Centerwell Senior Primary Care, entered into an agreement to acquire the assets of The Villages Health, the healthcare system for The Villages retirement community in Florida, following The Villages Health's filing for Chapter 11 bankruptcy in July. Centerwell is the nation's largest senior-focused value-based primary care provider. Finally, Astrana Health (Nasdaq: ASTH), finalized its $708 million acquisition of Prospect Health, just shy of its previously announced $745 million valuation. Prospect Health operates a value-based care network with more than 11,000 providers across Southern California, Texas, and Rhode Island.

In August, CentralReach, a provider of autism and intellectual and developmental disabilities (IDD) care software, announced that it acquired SpectrumAI, a provider of predictive analytics and clinical decision support services, and AI.Measures, the developer of an AI-powered multi-modal assessment tool for individuals with autism. The acquisitions will enable CentralReach to facilitate the provision of "outcome-based care" by autism and IDD care organizations nationwide.

In September, Privia Health Group (Nasdaq: PRVA) announced that it signed a definitive agreement to acquire Evolent Care Partners, the ACO business arm of Evolent Health (NYSE: EVH). Under the terms of the Agreement, Privia will pay $100 million in cash at closing and up to an additional $13 million, subject to the target's performance in the Medicare Shared Savings Program during the fiscal year. As a result of the transaction, Privia will serve approximately 1.5 million patients in value-based care arrangements. Also in September, Kaiser Permanente, a nonprofit managed care behemoth serving over 12.4 million patients, announced its agreement to enter into a joint venture with Renown Health, a leading health system in Nevada, which is expected to close in early 2026. The combined entity, Kaiser Permanente Nevada, would operate a health plan and ambulatory health system in northern Nevada, and Kaiser would acquire a majority stake in Renown Health's insurance arm, Hometown Health, which currently boasts over 70,000 members. Also in September, CareSource received regulatory approval to acquire ElderServe Health, which, under the moniker RiverSpring Health Plans, serves more than 20,000 older adults and individuals living with chronic conditions. With this affiliation, CareSource offers managed care services in 14 states to Medicaid and marketplace health plan beneficiaries. Finally, GovCIO, a portfolio company of Welsh, Carson, Anderson & Stowe, announced the closing of its acquisition of SoldierPoint Digital Health from Iron Bow Technologies, a portfolio company of H.I.G. Capital. SoldierPoint provides digital health solutions to over 2.7 million veterans through its partnership with the Department of Veterans Affairs. GovCIO is a federal government contractor that provides advanced technology solutions and digital services to government agencies. Following this acquisition, GovCIO will oversee SoldierPoint's seven-year $2 billion Connected Care Integrated Network (CCIN) contract with the VA and will support over 4 million veterans through its telehealth platform.

Pharma Services, Pharmacy & Pharmacy Benefit Managers

The big headline in the pharmacy world in Q3 was the sale of Walgreens Boots Alliance (Nasdaq: WBA) to Sycamore Partners in a going private transaction. After first being announced in March, on August 28, the parties announced the closing of the $10 billion transaction and that Walgreens, The Boots Group (Walgreens' international retail pharmacy chain) and Walgreens' healthcare subsidiaries, Shields Health Solutions, CareCentrix and VillageMD, will now operate as separate, standalone companies. The parties also announced that Mike Motz, who formerly served as President of Canada-based pharmacy chain Shoppers Drug Mart and, later, as CEO of Staples, another Sycamore portfolio company, was appointed as the new CEO. Motz labeled the transaction a "turning point" for the struggling enterprise, which around the same time last year, had signaled it was contemplating a full sale of its VillageMD primary care service line after spending $5.2 billion for a majority stake in it only a few years prior. If Motz and the leadership teams are successful, it may fuel further PE investment in the retail pharmacy space, and likewise embolden strategic buyers (e.g., payors, pharma companies and pharmacy retailers) to continue to vertically integrate with healthcare providers.

Conclusion

As we move further into Q4, the healthcare M&A market certainly faces headwinds, including the continued shutdown of the U.S. government. However, coming off a strong Q3 and with interest rates expected to decrease further, there is room for cautious optimism among industry stakeholders.