Young professionals session
The day began with a lunch-and-learn session, hosted by Nixon Peabody’s up-and-coming dealmakers, focused on the basics of healthcare M&A transactions. They discussed the importance of transaction structuring (particularly in light of state-specific corporate practice of medicine restrictions and other regulatory issues), due-diligence red flags, healthcare-specific documents and clauses, and the nuances of representation and warranty insurance. Panelists included NP’s Shaziah Singh, Anthony Bova, Andrew Maglione, and Dave Zimmermann, and the discussion was moderated by NP’s Rachel Pugliese.
NP Capital Connector growth company showcase
Andrew Goodman and Brooke Furst—leaders of the NP Capital Connector Program—then hosted an investment showcase featuring four growth-stage companies in various healthcare verticals:
- Aktiv – A drug delivery device startup, developing the PenPal next-generation autoinjector platform to address emerging unmet needs for medication self-administration.
- BeHold Health – A telehealth-focused startup in optometry services seeking to acquire practices in "vision-care deserts" where patients face lengthy waits for critical services.
- Parallel Health – A dermatology platform using phage therapy and leveraging AI to deliver custom compounded prescriptions based on a person’s unique skin microbiome.
- Rebion – A company spun out of Boston Children’s Hospital that non-invasively assesses brain health using its FDA-cleared retinal scanning device to diagnose and manage life-altering brain diseases.
Keynote address
The featured event of the afternoon began with keynote speaker Brigadier General Jack Hammond, US Army (Ret.), the Executive Director for the Home Base National Center of Excellence for Mental Health and Brain Injuries. General Hammond discussed the various hurdles US veterans face in the treatment of their traumatic brain injuries in our VA healthcare system and highlighted the ground-breaking treatment modalities available to veterans through Home Base. Nixon Peabody also hosted 51 Vets, a nonprofit career advancement organization helping US veterans in MBA programs transition to the investment banking and private equity industry. We were particularly honored to include the 51 Vets participants in our day and honor their service at our event held on September 11—a day that sparked many of them to join the Special Forces.
The evolution of healthcare M&A: A snapshot of 2025 and beyond
The program continued with our Hot Topics panel, moderated by Nixon Peabody M&A/PE partners Greg O’Shaughnessy and Amy O’Keefe. The following list of panelists discussed the current state of middle-market M&A in the healthcare industry and the trends they foresee for the M&A and PE healthcare markets as we close out 2025:
- Todd Cozzens – Managing Partner/Co-Founder, Transformation Capital
- Zach Leach – Director, Ironwood Capital
- Ray Reaves – Director, Healthcare Services Stout
- Derek R. Spence – Managing Principal, Striker Partners
- Albert Yun – VP of Corporate Development, Novanta
Current state of the healthcare M&A market
The healthcare M&A market remains challenging but active. Increased tariffs and increasing labor costs are slowing timelines. Buyers are insisting on deeper due diligence, which has extended closing schedules but also elevated transaction quality. The first half of 2025 saw transaction volumes drop significantly (as compared to the deal-laden COVID-19 years), but backlogs are high, and deal flow is expected to increase—particularly for “A” quality assets—considering funds need to provide liquidity to investors.
Healthcare AI continues to be a massive industry disrupter. The anticipated use cases for AI in the healthcare technology sector (such as billing code validation) are driving extreme efficiencies already. However, few companies are built around quality AI models, and prospective buyers should conduct deep due diligence into any AI-focused target company. Investors are also discovering that healthcare-specific AI models are more difficult to create and train than anticipated. On balance, though, the panel expects that healthcare AI will continue to garner interest and value as the technology matures.
Impact of the new administration & regulatory developments
The One Big Beautiful Bill Act (OBBBA) has introduced both pressure points and avenues for growth in healthcare M&A. Industry projections show that Medicaid spending cuts over the next 10 years (in the range of $10 trillion) are squeezing hospital margins and raising lender caution, especially for single-state, Medicaid-focused businesses. The pharmaceutical industry is facing immense margin and pricing pressure due to these Medicaid cuts. As a result, impacted companies are outsourcing their non-core services (e.g., site management, contract research, commercial agreement negotiation, etc.).
On the positive side, OBBBA made significant pro-business and pro-investor tax and financing changes, including:
- Interest expense limitations permanently set at 30% of EBITDA;
- 100% immediate depreciation expenses made permanent for certain qualifying assets;
- Favorable R&D expense treatment allowing for 100% of domestic R&D expenditures to be immediately deductible; and
- Expanded qualified small business stock exclusions for ancillary healthcare service providers (excluding physician services and consulting services).
What’s ahead for healthcare investing & M&A
The next phase of healthcare M&A is likely to shift beyond traditional provider roll-ups toward specialized services and technology integration. Investors are zeroing in on contract development and manufacturing organizations and outsourced pharmaceutical services, recognizing the scalability of these models. Medical equipment service companies—especially those maintaining robotic systems and specialized hospital technologies—are poised for consolidation.
Changes in drug technology and reimbursement rates are pushing the administration of certain drugs to infusion delivery systems. Given this trend and the anticipated growth in autoimmune and rheumatology infusion, ambulatory care centers and in-home infusion businesses are expected to grow significantly. As healthcare M&A adapts to new regulatory, financial, and operational realities, dealmakers who embrace sector-specific insights and innovative transaction structures (including earn-outs) will be best-positioned for success.
