Inside the Healthcare Deal Market with Craig Sager of Provident Healthcare Partners

Becker's Healthcare Podcast | October 18, 2025
Host: Scott Becker
Guest: Craig Sager, Managing Director, Provident Healthcare Partners

Episode Overview

In this episode, Scott Becker interviews Craig Sager, a seasoned healthcare investment banker and Managing Director at Provident Healthcare Partners. The conversation explores the current state of the healthcare deal market, shifting trends in healthcare M&A, the types of organizations driving transactions, hot sectors (with a spotlight on behavioral health and healthcare technology), and the distinctions between different investor types. Sager also shares personal insights from his career, the role of intermediaries, and what excites him most in today’s environment.

Key Discussion Points & Insights

1. Craig Sager’s Background & The Role of Investment Bankers

[00:41–03:01]

• Craig’s Experience:
  • 15 years in healthcare M&A, spanning both the buy side (corporate development at places like Optum and a healthcare PE firm) and the intermediary side at Provident.
  • Unique vantage point from handling both acquisition and investment processes.
• Provident’s History & Focus:
  • One of the first specialized healthcare investment banks, active since the late 1990s.
  • Acts as a “river guide” for organizations navigating transactions – from full sales to minority investments or debt raises.
  • Functions as an essential intermediary connecting innovative healthcare businesses to institutional capital.

“Our job as a firm...is to really be the river guide for organizations going through a transaction process.”
— Craig Sager [02:04]

2. Types of Clients and Sector Focus

[03:01–04:29]

• Client Mix:
  • 75% are founder-owned healthcare businesses.
  • 25% are private-equity-backed companies.
• Sector Specialty:
  • Breadth across healthcare services, with limited exposure to life sciences/drug development.
  • Strong focus on provider services (practice management, post-acute, behavioral health), staffing, DME, and payer services.
  • Increasing activity in healthcare technology.
• Deal Scale:
  • Ranges from solo-owner businesses to large medical groups with over 100 physician shareholders.

3. Market Activity: What’s Hot, What’s Not

[04:29–06:25]

• Market Segments:
  • The lower middle market ($20M–$500M deals) is the most active due to macro headwinds (e.g., debt environment, political factors) stalling mega-deals.
  • Traditional provider practice management (PPM) is slowing after years of intense consolidation and ongoing staffing shortages.
  • Behavioral health: Rapidly accelerating deal flow.
  • Value-based care: Always in demand due to its model innovation.
  • Health tech/tech-enabled businesses: Attracting more investor attention as the sector matures.

“In healthcare, the lower middle market...is the most active.”
— Craig Sager [04:58]

4. Health Tech: Platforms vs. Point Solutions

[06:25–08:33]

• Activity in Health Tech:
  • Digital health and revenue cycle technologies are prominent, with a mix of comprehensive platforms (offering everything from EMR to back-office analytics) and narrowly focused point solutions (e.g., staffing or value-based care analytics, AI tools).
• Observation on Point Solutions:
  • Most startups are niche point solutions struggling to reach cash flow break-even or scale.
  • Building robust, end-to-end platforms requires significant resources and strategic vision.
• Minority Growth Capital:
  • Tech deals often favor minority growth investments vs. outright sales.

“More times than not, they’re more nichy point solutions...building a true end-to-end solution takes a lot of sophistication, a lot of developers, a really important vision from the leadership team.”
— Craig Sager [07:54]

5. Types of Investors: Private Equity, Growth Equity, Venture Capital

[08:33–10:40]

• Investor Landscape:
  • Over 1,000 capital groups with at least partial healthcare focus.
  • Private equity: Controls most service business deals, typically prefers controlling stakes in companies with cash flow/EBITDA.
  • Growth equity & venture capital:
    • More prevalent in tech/tech-enabled deals, prefer minority investments, spread risk across portfolios given higher failure rates in tech.
    • Service businesses see less minority capital due to slower scaling but steadier cash flow.

“On service deals...generally their investors want control of those businesses. Vice versa in a technology company...you see a lot more minority deals given all of the venture funds out there.”
— Craig Sager [09:19]

6. Craig’s Current Focus and Excitement: Behavioral Health

[10:40–11:59]

• Behavioral Health Spotlight:
  • Rapidly evolving yet under-invested compared to other healthcare sectors.
  • Emerging companies—both founder-owned and PE-backed—are tackling diverse needs (mental health, IDD, autism, eating disorders, etc.).
  • Each company employs unique models and growth strategies; sector remains much less consolidated than others.
  • Massive demand and a sense that “every day we wake up and it’s, you learn something.”

“There’s a lot of cool stuff going on in behavioral health.”
— Craig Sager [11:45]

Notable Quotes & Memorable Moments

• “Our job as a firm, my job...is to really be the river guide for organizations going through a transaction process.”
  — Craig Sager [02:04]

• “In healthcare, the lower middle market...is the most active.”
  — Craig Sager [04:58]

• “More times than not, they’re more nichy point solutions...building a true end-to-end solution takes a lot of sophistication...”
  — Craig Sager [07:54]

• “There’s a lot of cool stuff going on in behavioral health.”
  — Craig Sager [11:45]

Timeline of Important Segments

• 00:41–03:01 — Craig Sager's background & history of Provident Healthcare Partners
• 03:01–04:29 — Types of clients; sector focus and range of deals
• 04:29–06:25 — Market activity: Active sectors, market drivers, and cooling areas
• 06:25–08:33 — Health tech deals: platforms versus point solutions
• 08:33–10:40 — Investor types and distinctions (PE vs. VC/Growth Equity)
• 10:40–11:59 — Behavioral health sector: Unique challenges and opportunities

Conclusion

This episode offers a concise yet thorough look at the state of healthcare dealmaking through the lens of a seasoned investment banker. Sager provides actionable industry insights—from the fragmented but active lower middle market, to the maturation of health tech, to the real momentum in behavioral health. The episode is essential listening for anyone interested in healthcare investment, M&A processes, or the forces reshaping the sector today.