UK healthcare dealmaking bounces back, with buyers getting choosier

UK healthcare M&A bounced back sharply in the second quarter of 2026. Heligan recorded 78 transaction (68 completed, 10 still to be announced), a 47% jump on the 53 deals seen in the first quarter and broadly in line with the 79 recorded in the same quarter last year. The rebound looks less like a one-off spike and more like a return to the sector’s underlying pace, after a slow start to the year driven by wider macroeconomic caution.

Strategic buyers accounted for 86% of deals, while private equity made up just 14%, down from around 19% in the first quarter and below the 18% seen in both quarters of 2025. That fall reflects sponsors narrowing their aim rather than losing interest, concentrating capital on fewer, higher-conviction platforms instead of chasing volume across the board.

UK-to-UK transactions made up 69% of the quarter, with outbound deals at 22% and inbound activity at 9%. UK operators and investors are still the ones setting the pace of consolidation, using M&A to add scale, diversify services and expand into new regions.

Scale is winning in health and social care

Health and social care again drove volume, accounting for 54 of the 78 deals recorded, around 69% of the total. Activity spanned residential elderly care, specialist care, home care and childcare, reflecting pressure right across the care economy: rising wage costs, tighter regulatory oversight and steady demand from an ageing population.

Toscafund’s proposed acquisition of the remaining 81.93% of Spire Healthcare it does not already own, for around £820 million, implies an enterprise value of roughly £2.84 billion for the business, a multiple of about 8.7 times EBITDA. If it completes, subject to confirmatory due diligence and a firm offer under the Takeover Code, it would mark one of the largest privatisations of an independent UK hospital operator in years. At the other end of the scale, Sovereign Capital Partners-backed Eden Futures acquired Complesso Healthcare Solutions, a smaller bolt-on that extends its complex care offering into the West Midlands. Between those two deals sits most of the quarter’s activity: operators buying capability and geography rather than making a single transformational move.

Pharma is paying up for assets that are nearly ready

Pharmaceuticals and life sciences produced only seven deals in the quarter, but a disproportionate share of the value. GSK accounted for more than 70% of disclosed sector value on its own, agreeing to buy US-based Nuvalent for around £7.95 billion, its largest acquisition in more than a decade, on top of an earlier deal to acquire Siran Biotechnology for up to £750 million. Nuvalent’s pipeline includes next-generation cancer treatments already at a relatively advanced clinical stage, and the message from both deals is the same: GSK is paying for assets close to market rather than betting on early-stage science.

Private equity showed it can pay similar multiples when the asset fits. Charterhouse Capital Partners’ recommended offer for veterinary pharma group Animalcare values the business at around £330 million, a multiple of roughly 29.5 times EBITDA, among the highest in the sector this quarter and a reflection of Animalcare’s position as a specialist, growth-oriented platform with its own development capability.

Technology platforms are commanding premium attention

Healthcare IT and medtech deals underlined how much buyers value recurring revenue and high switching costs. TPG’s roughly £1.2 billion acquisition of Optum UK includes EMIS, the patient record system used by most NHS GP practices, a deal that signals continued confidence in regulated software deeply embedded in the health system. PsychPlus’s acquisition of Koa Health, a UK digital mental health platform built on 56 patents and developed with Harvard and Oxford, pairs US clinical reach with a validated European technology base capable of serving more than six million patients globally.

Some deals show buyers sharing risk rather than paying it all upfront. Davion Healthcare’s proposed £45 million acquisition of medical technology company Humaskan structures 83% of the consideration as an earn-out tied to future performance, a sign that Davion has conviction in Humaskan’s underlying IP but wants commercialisation proven before the full price is paid.

Nursery consolidation is quieter but no less structural

Nursery and childcare produced eight transactions, around 14% of all Q2 deals, none with disclosed values, consistent with a market of mostly owner-managed, private businesses. No private equity fund appeared as a direct buyer, but sponsor money sits behind several of the acquirers, including Kids Planet, Storal Nurseries and Happy Days Nurseries, and the same fragmentation and consolidation pressure is playing out here as across the wider care economy.

We go into this subsector in more depth in Nursery fragmentation fuels consolidation.

What it means for owners

The report’s own conclusion sets the tone for the quarter: 

“Healthcare has remained one of the more resilient areas of the market. Long-term demand drivers are still giving buyers clear reasons to invest, even where diligence is taking longer and valuations are being tested.”

External valuation data points the same way as Heligan’s own figures. Deal Ascent’s analysis of around 75 listed healthcare peers puts the median 2026E multiple at 12.8 times EBITDA, with care home operators trading closer to 7 times and diagnostics and life-science tools businesses closer to 17 times. The spread is wide, and where a business sits within it depends heavily on how defensible and hard to replace its earnings actually are.

For owners considering a sale or investment, Q2 2026 offers two practical lessons:

1. strategic buyers are setting the pace, so a business that can show operational synergies and defensible demand is likely to draw more serious interest than one relying on financial engineering alone, and…
2. private equity has not disappeared, but rather raised its bar, and businesses with resilient cash flows and a credible growth story are still finding well-priced capital.

If you want to understand where your business sits in today’s healthcare M&A market, Heligan’s Healthcare team can help. Contact Ramesh Jassal, Partner, Corporate Finance, Healthcare, at [email protected].