UK Healthcare M&A hits the ground running in January 2025
The shifting healthcare landscape presents a wealth of opportunities as the sector readies for an M&A rebound.
UK Healthcare M&A kicked off 2025 with 17 deals in play in January, with six announced and 11 complete. Pharma and life sciences were the most active sectors, contributing 35% of the deal volume. This was driven by announcements from big pharma, including the sale of Alliance Pharma to DBAY Advisors and GSK’s acquisition of IDRx.
Deal volume is down from 22 deals in January 2024, but this does not necessarily signal a subdued deal flow for Q1. Overall strategic buyers accounted for 71% of deal volumes, while private equity activity was strongest in medical devices. Outbound deals made up 29% of the activity, compared to 18% inbound, with UK buyers focusing on foreign expansion in the US and Italy.
Ramesh Jassal, Partner at Heligan Group, said, “Already in 2025, the occupational health sector has experienced notable M&A activity. The total addressable market size for occupational health services is expected to reach £1.9 billion in the UK in 2025, driven by an increasing emphasis on employee well-being and regulatory compliance.
“Key players will continue to benefit from acquiring smaller players to grow their market share in this fragmented sector. Indeed, in recent years, big players have obtained PE-backing and subsequently completed bolt-on acquisitions to expand their offering," added Jassal. "In January, there were two notable deals in occupational health, AIM-listed Optima Health announced it would buy BHSF Occupational Health, and Canadian firm Cority Software acquired Southampton-based Medical Management System.
“The pharmaceutical industry has also seen substantial M&A activity, reflecting a strategic focus on expanding portfolios and enhancing R&D capabilities. Prominent deals include Alliance Pharma's £350 million takeover of DBAY Advisors and GSK’s acquisition of IDRx.”
Given the evolving US healthcare landscape under the Make America Healthy Again (MAHA) agenda, led by RFK Jr the disruptor, and, given his confirmation, many are wondering how this will impact M&A activity by non-US strategic buyers.
Jassal continued, “With the administration’s focus on shaking up healthcare policies, non-US buyers - particularly those from Europe - may need to adapt their strategies. As RFK Jr. begins to implement these policies, it may be the case that non-US companies may seize opportunities for expansion or changing regulatory and market conditions could create challenges for access.
“Overall, as these policies take effect, we anticipate a gradual shift in the healthcare sector towards preventative medicine, with an increased focus on promoting lifestyle changes and addressing environmental factors that contribute to chronic diseases.
“Ultimately, despite potential hurdles, the shifting landscape presents a wealth of opportunities for those ready to innovate and strategically position themselves in the new healthcare environment. The deals completed in January signal a good intention by buyers that sets the scene for the rest of the year,” concluded Jassal.
