What You Should Know:
– According to PwC’s 2026 Health Services Deals Outlook, the M&A market is set to regain momentum in both deal value and volume after a cooling period in 2025.
– The report highlights a strategic pivot among private equity investors away from reimbursement-heavy assets toward AI-enabled software and services that drive margin expansion without adding labor. With the IPO window reopening and “mega-funds” returning to offense, the winners in 2026 will be those who move quickly to reshape portfolios before regulatory policy shifts force their hand.
The Velocity Return: AI and “Bolt-Ons” to Define 2026 Health Services Dealmaking
If 2025 was a year of calibration, 2026 is shaping up to be the year of velocity. After a period defined by valuation gaps and regulatory hesitation, the health services M&A market is poised for a significant rebound. According to new data from PwC, the sector is entering an inflection point where deal volume and value will grow as investors deploy capital with renewed precision.
The headline isn’t just that deals are coming back; it’s how they are structured. The era of buying growth for growth’s sake is over. In its place is a disciplined focus on tech-enabled efficiency, where Artificial Intelligence (AI) has graduated from a shiny “bolt-on enhancement” to a “core driver of margin expansion”.
AI: From Experiment to Valuation Multiplier
For years, technology journalists have covered AI as a potential disruptor. In 2026, it becomes a financial necessity.
PwC’s outlook suggests that sustainable value creation for both private equity (PE) and strategic buyers will now depend on embedding AI capabilities that drive measurable productivity gains. This goes beyond the low-hanging fruit of automating clinical documentation. Acquirers are now evaluating assets based on their ability to use AI for workforce optimization and revenue cycle management—scaling operations without proportionally adding labor.
“Companies who are viewed to benefit from AI tailwinds are seeing outsized multiples and deal activities,” noted Ramzi Ramsey, Senior Managing Director at Blackstone Growth, in the broader market analysis. Conversely, assets where the AI impact is “cloudy” may find themselves with no bid at all.
Private Equity’s New Playbook: Dodging Reimbursement Risk
Perhaps the most significant shift in the 2026 landscape is where private equity is placing its bets.
Facing an uncertain US regulatory environment and reimbursement headwinds, PE sponsors are fundamentally shifting their strategy. They are moving away from businesses heavily exposed to government reimbursement rates and toward software and services platforms that support care delivery.
This flight to quality explains the surging interest in:
- Behavioral Health Platforms: Commanding strong multiples due to scalability.
- Ambulatory Surgery Centers & Home Infusion: High-growth subsectors with favorable reimbursement direction.
- Tech-Enabled Care Delivery: Platforms that offer “measurable operational upside”.
The “Carve-Out” and “Bolt-On” Surge
As the market heats up, we are seeing a bifurcation in deal types. On one end, health systems and diversified corporations are pursuing carve-outs—selling off non-core assets like labs, home health units, and revenue-cycle departments to generate liquidity.
On the buying side, investors are favoring “bolt-on” acquisitions—smaller companies that can be integrated into existing platforms to add specific capabilities or geographic reach. This strategy allows firms to build scale and specialization while mitigating the risk associated with massive, transformative mergers that might attract antitrust scrutiny.
The Need for Speed
The backdrop to this resurgence is a “need for speed.” With policy shifts arriving faster—including renewed debates over site-neutral reimbursement—proactive acquirers are moving early to realign their portfolios.
The IPO window is also cracking open. Private equity investors, sitting on a backlog of high-quality assets, are expected to utilize improved market conditions to return to the public markets. This creates a “meaningfully improved exit environment” that could widen deal pathways for mid-market players.
For dealmakers in 2026, the message is clear: The capital is there, and the opportunities are real, but the window to act before policy shifts force your hand is narrowing. The winners will be those who treat technology not as a feature, but as the foundation of their investment thesis.
