When is a sale not (fully) a sale? What one structuring story reveals about Healthcare exits

For an SME owner considering a sale, the natural assumption is that a deal's headline value is broadly what will land in the bank. One transaction from our Healthcare M&A report challenges that assumption directly: a healthcare business valued at £45 million, where the vast majority of that value was not paid on completion at all.

Value and certainty are not the same thing

Increasingly, buyers in healthcare are separating what a business is worth from what they are prepared to pay up front. Where a target holds strong intellectual property or a promising pipeline but has yet to prove its commercial traction, buyers are structuring consideration so that most of the value transfers only after specific performance milestones are met. For SMEs, the implication is pretty straightforward: a headline valuation and a guaranteed outcome are not the same thing, and the gap between the two has become a defining feature of healthcare M&A dealmaking.
 

Why buyers structure deals this way

This approach reflects a rational allocation of risk rather than a lack of conviction from the buyer. They may have genuine confidence in a business’s underlying technology or intellectual property, and remain more cautious about the pace and certainty of its commercialisation. Rather than pricing that uncertainty into a lower upfront figure, or declining to transact altogether, we’re seeing buyers increasingly willing to agree a higher total valuation on the condition that a substantial portion of it is earned over time. 

This allows both parties to reach agreement on value while aligning the seller's incentives with the business's continued performance post-completion, an outcome that can work well for both sides, provided the seller enters the negotiation with a clear understanding of what is being asked of them.
 

A prime example of just this behaviour

Davion Healthcare Plc, a digital healthcare company, announced the proposed acquisition of Humaskan Ltd, a UK-based medical technology business focused on proprietary healthcare products and intellectual property, for £45 million in 2026. The structure of that consideration is the notable part: £7.5 million was payable in cash up front, with the remaining £38 million structured as an earnout, contingent on Humaskan meeting agreed performance milestones.

In other words, 83% of the total consideration (the substantial majority of the deal's value) depended on what happened after completion, not on the day the transaction closed. This suggests Davion had genuine conviction in Humaskan's underlying IP and product pipeline, but the parties chose to align risk around the commercialisation of that pipeline, rather than transferring it in full at the point of sale.
 

What this means outside of a single transaction

This is not an isolated feature of one deal. It reflects a broader, recurring pattern across healthcare M&A, particularly where a target's value is closely tied to intellectual property, clinical potential or a product still in the process of proving itself commercially. For owners of businesses in medical technology, digital health, or any subsector where the strongest asset is early-stage IP rather than an established, recurring revenue base, this structure is worth understanding well before a process begins, not once terms are on the table.
 

The practical implication is that preparation for an exit should extend beyond establishing a credible valuation. Owners should think carefully about which parts of their business case are already proven and which remain forward-looking, since that distinction will shape how much of any eventual consideration a buyer is prepared to commit unconditionally. A business with clear commercial traction and a demonstrable order book is in a materially different negotiating position to one whose value rests primarily on potential still to be realised.
 

For owners approaching a future transaction, the more useful question is rarely "what is my business worth?" in isolation. It is “how much of that value would a buyer be prepared to pay on day one?” and “how much of that value depends on potential?”.

Deal structures of this kind are a recurring feature across healthcare M&A. Heligan's Corporate Finance team works with healthcare business owners to understand how buyers are likely to value and structure a transaction well ahead of any process. Get in touch to discuss what this could mean for your business.