Last month, industry leaders convened in San Francisco for the 44th annual J.P. Morgan Healthcare Conference. Jon Hammack, Head of Healthcare at Solomon Partners, shared his views on where momentum is building—as well as the challenges remaining—in healthcare M&A heading into 2026.
Hammack’s top insights include:
1. M&A Momentum Is Improving—But the Real Inflection May Hit Later in 2026
While much of the market narrative focused on a “strong” 2025 for healthcare M&A, he noted that underlying deal volume tells a more nuanced story: While megadeals and strategic acquisitions boosted headline value, deal count and mid-market activity—the core health indicator of the M&A ecosystem—remained soft.
The good news:
- Backlogs across the industry, including those of Solomon Partners, are meaningfully healthier than a year ago.
- Certain subsectors showed renewed energy in late 2025, forming what Hammack described as “green shoots” heading into the new year.
The caution: Market sentiment at J.P. Morgan suggested that while 2026 should outperform 2025 in mid-market Private Equity, many participants expect activity to be “backend weighted,” echoing the same hesitations voiced a year ago.”
Bottom line: Momentum is real, but a broad-based rebound will likely build gradually throughout the year—not overnight.
2. Healthcare IT, MedTech & Life Sciences: A Resilient Set of Bright Spots
Hammack expects:
- Healthcare IT, tech-enabled services, and digital health will remain highly active M&A areas.
- MedTech is showing signs of acceleration from prior years’ softness, following major strategic announcements and private equity focus on contract manufacturing and other outsourced services.
- Life sciences will continue its momentum in 2026 across biopharma and radiopharma.
Bottom line: Software-enabled care models, revenue cycle management, virtual care, and radiopharma remain in high demand and continue to draw interest from both strategic and financial sponsors.
3. Healthcare Services Markets Show Mixed Conditions—But Key Subsectors Could Reaccelerate
Healthcare services saw the sharpest bifurcation in 2025. Hammack described it as a “mixed bag,” with physician practice management still slow while sectors such as post-acute, infusion/pharmacy and pharma services are still viewed as attractive.
Key dynamics influencing 2026 activity include:
- Interest rates easing, which helps normalize buy and build economics.
- Significant private equity backlog, particularly in multisite, with many assets held for 5+ years and investors seeking exits.
- Large strategic mergers, with PE-owned assets and/or distributors/other corporates evaluating the multisite space.
- Valuation equilibrium still forming, creating friction but also pent-up demand.
- Alternative capital/liquidity solutions, with minority sales, preferred equity solutions, and CVs continuing to play a meaningful role.
Bottom line: Healthcare services won’t rebound uniformly, but select subsectors, asset mergers and continuation vehicles will shape deal flow patterns in 2026. Multisite isn’t dead, at least not across the board, and we expect to see activity in some specialty areas, and even some thawing in subsectors that have been challenged over the past few years.
4. A Final Thought: Investors Are Becoming More Selective—But Not Less Ambitious
Across discussions in San Francisco, one theme was clear: Investors are prioritizing scalability, profitability, and clear pathways to liquidity. Whether in consumer health tech, tech-enabled services, med tech or traditional services, buyers are focused on categories where structural tailwinds and maturing business models intersect.
As Jon Hammack put it, “2026 is going to be a better year—just not all at once.”
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