The Health IT market is at a turning point – record buyout activity, rising valuations, and pro-business policy shifts are shaping the path ahead.
Healthcare Growth Partners is excited to release its 2025 Health IT Market Review, offering a detailed analysis of the trends and dynamics shaping the industry. From M&A valuations to investment priorities and policy shifts, this report highlights key forces that will define the Health IT landscape in the coming year.
To download the complete report, drop your name and email in the sign up form at the footer of this page or in the footer of www.hgp.com and a copy will be sent to you. As always, please let us know if you have any questions or comments.
Key Takeaways:
- M&A Valuations Rebound: After starting 2024 at 4.0x revenue, valuations dipped mid-year but closed strong at 4.3x, nearing pre-pandemic levels. High-quality transactions gained prominence, reflecting increased deal quality even as the market works through a backlog of overcapitalized companies.
- Record Buyout Activity: 2024 saw 86 buyout transactions, the highest on record, driven by private equity sponsors who capitalized on opportunities left by sidelined strategic acquirers. Competitive processes for larger deals achieved premiums of 15-20x+ EBITDA.
- Shifting Investment Sentiment: Growth equity and buyout investors are optimistic, emphasizing profitability and deal flow, while venture capital remains cautious as the market adjusts to new expectations. Non-buyout US Health IT investment activity in 2024 reached approximately $10 billion, 10% below pre-pandemic levels.
- AI Investment Shifts: Health IT AI investment surged past $3.4 billion, with a sharp pivot toward workflow optimization tools over clinical applications, reflecting evolving adoption trends in the sector.
- Policy and Economic Dynamics: The incoming Trump administration’s focus on transparency and preventive care is expected to bolster growth in Health IT, while easing inflation and interest rates create a more stable environment for capital deployment.
