The healthcare services mergers and acquisitions (M&A) landscape in 2023 kicked off at a slower pace compared to the record-breaking M&A volumes seen in 2021 and 2022. Challenges like surging costs, inflationary pressures, and the looming possibility of a recession influenced the healthcare investor market in 2023. Though we witnessed a dip in deal volume and multiples across many healthcare sectors in 2023, the market shows some signs of not only steadying but potentially gearing up for a flurry of activity in 2024.

One notable theme is the across-the-board rise in costs, coupled with a struggle among providers in certain sectors to maintain adequate staffing levels. Uncertainty loomed over the reimbursement landscape in some areas such as home health, and elevated interest rates made debt more expensive for investors. Faced with these headwinds, we saw investors being more selective and discerning with their investments in 2023, resulting in fewer completed transactions. McBee witnessed many of its clients focus on internal initiatives, such as streamlining compliance, operations and pursuing organic growth in 2023, as opposed to seeking inorganic growth.

Despite the challenges and regulatory shifts that continued in 2023, the healthcare sectors highlighted in this report boast a long runway for consolidation, leading us to believe the healthcare M&A landscape is positioned to bounce back in 2024 and maintain its long-term momentum.

Read our whitepaper for even more insights on the market impacts and trends impacting the M&A landscape. We cover contributing factors to consolidation like capital gains tax increases, high industry fragmentation, growing Private Equity interest in healthcare & more.