Becker Private Equity & Business Podcast: Mid-Year Healthcare Private Equity Trends with Amber Walsh

Release Date: July 9, 2025

Introduction to Healthcare Private Equity Trends

In the mid-year episode of the Becker Private Equity & Business Podcast, host Scott Becker engages in an insightful discussion with Amber Walsh, a member of the executive committee at McGuire Woods. Amber, who operates at the crossroads of private equity and healthcare, provides a comprehensive analysis of the first half of 2025's private equity activities within the healthcare sector, drawing on data from PitchBook reports and her extensive legal experience in deal-making.

Ongoing Resilience in Healthcare Deal-Making

Amber Walsh underscores the resilience of the healthcare private equity market, emphasizing that despite economic uncertainties, the sector continues to exhibit strong deal-making activities.

“The theme continues to be ongoing resilience of the health care deal making market.”
[00:31]

She highlights that private equity-backed healthcare deals have remained robust, with data from PitchBook confirming an uptick in deal activity compared to the previous year. Amber attributes this resilience to a combination of consistent institutional capital and strategic acquisitions.

“We are tracking to be up in the first two quarters of 2025 across the board... not industry specific, but private equity backed deals.”
[02:10]

Deal Activity and Market Dynamics

Scott Becker raises an important observation from market reports: while the total dollar volume of deals has increased year-over-year, the number of deals has decreased by approximately 15-16%. This suggests a shift towards larger transactions that offset the decline in smaller and midsize deals.

“The overall dollar volume of deals is up year after year, but the number of deals is not up. That was down about 15%, 16%.”
[03:34]

Amber confirms this trend within the healthcare sector, noting that large-scale deals, often exceeding one billion dollars, dominate the market. She points out that these significant transactions largely occur in tech-driven areas such as pharmaceuticals, biotech, and medical devices.

“Every single one of those 20 was in tech, pharma, biotech or device.”
[05:00]

Sector-Specific Activity within Healthcare

The conversation delves into the varying levels of activity across different healthcare segments. Amber observes that physician specialty deals and facility-heavy transactions have seen a slight decline in activity, though they remain active.

“Those physician specialty deals, even the facility heavy deals, a little bit less activity... you do still see deals being done.”
[04:22]

In contrast, tech-driven healthcare sectors such as revenue cycle management and health IT are experiencing heightened activity. These areas benefit from the integration of technology with healthcare services, attracting substantial private equity interest.

“It is heavier in tech driven health care... those, the lower middle market deals, it's still being more tech driven than physician specialty driven.”
[05:49]

Scott adds that certain specialties like orthopedics and esthetics plastic continue to perform well, maintaining healthy margins and driving deal momentum, whereas others with slimmer margins face more challenges.

“Orthopedics... it seems like things continue to sort of move forward in a good deal. That's just a very quick sense of it.”
[06:25]

Private Equity Strategies and Future Outlook

Amber discusses the strategies employed by private equity firms, noting that many are diversifying their investments across various healthcare sub-sectors to create a complementary portfolio. This approach aims to integrate technology with service-oriented investments, enhancing overall value and operational efficiencies.

“Some of those PE buyers also have separate investments in physician services and ASC companies... they have a cross section of different types of healthcare investments that complement each other.”
[06:25]

Looking ahead, Amber anticipates a potential reduction in exit hold periods for private equity firms, which had previously seen an increase to nearly five years. She suggests that this peak in hold periods might be waning, paving the way for more exits in the latter half of 2025.

“Exit hold periods for private equity firms... do look like coming into the middle of 2025 those are expected to go back down a little bit.”
[03:00]

Scott hints at future discussions, mentioning an upcoming episode featuring the CEO of DaVita, highlighting ongoing interest and developments in the dialysis industry—a sector with deep roots in the healthcare economy.

“It's one of the oldest healthcare industries... continues to be a vital part of healthcare economy.”
[07:21]

Conclusion

The episode concludes with Scott Becker expressing his appreciation for Amber Walsh's clear and concise insights into the healthcare private equity landscape. Their discussion paints a picture of a sector that, while not experiencing explosive growth, maintains steady and resilient activity, particularly in technology-driven areas.

“You are always concise, to the point, understand things better than almost anybody I know in the world.”
[07:41]

Amber reciprocates the gratitude, underscoring the collaborative nature of their discourse.

“Thank you, Scott.”
[07:55]

Key Takeaways:

• Resilience in Healthcare PE Deals: Despite broader economic fluctuations, private equity-backed healthcare deals remain robust.

• Shift Towards Larger Deals: An increase in total deal volume is driven by larger transactions, even as the number of deals declines.

• Tech-Driven Growth: Sectors such as health IT, revenue cycle management, and biotech are experiencing heightened private equity interest.

• Diverse PE Strategies: Private equity firms are diversifying their healthcare investments to create complementary portfolios.

• Future Outlook: Anticipated reduction in exit hold periods may lead to increased deal exits in the latter half of 2025.

This episode serves as a valuable resource for investors, healthcare professionals, and stakeholders interested in navigating the evolving landscape of healthcare private equity.