The UK healthcare M&A market recorded 53 deals in the first three months of this year, down from 72 the previous year and reflecting a more cautious dealmaking backdrop amid macro uncertainty and renewed geopolitical tensions in the Middle East.
Heligan Group’s ‘UK healthcare M&A Q1 2026’ update report reveals a 26 per cent year-on-year decline, with the health and social care sub sectors dominating the first quarter of the year, accounting for 57 per cent of deals driven by continued consolidation across fragmented, defensive sub sectors such as residential care, nurseries, complex care, pharmacy and broader healthcare services.
The report reveals that 81 per cent of buyers were strategic, consistent with 83 per cent in 2025 and reflecting a continued focus on synergies, scale and pipeline expansion, with private equity being the most active in medical devices and pharma.
Ramesh Jassal, partner for corporate finance (healthcare) at Heligan Group, said: “Deal flow remained broad-based in Q1, with notable hotspots in elderly care, pharma, pharmacies and medical devices, underlining sustained appetite for essential, needs-led services.”
Despite softer volumes, large-cap activity persisted, particularly in pharma and life sciences. Deals included GSK’s £1.7 billion acquisition of RAPT Therapeutics; Smith & Nephew’s £450 million acquisition of Integrity Orthopaedics; and Sovereign Capital Partners’ acquisition of Apollo Homecare.
Cross-border activity remained balanced, with 23 per cent inbound versus 20 per cent outbound deals, and UK buyers continued to prioritise US expansion, alongside interest in France, Germany and Belgium.
“Financing conditions remain tight,” added Jassal. “Elevated interest rates, staffing cost pressures and uncertainty around ICB funding are extending timelines and constraining deal execution.
“Geopolitical tensions, including US-Middle East dynamics, are also feeding into energy price volatility and inflation expectations, reinforcing a more-cautious, risk-off investor stance with greater valuation scrutiny.
“Despite a more-cautious environment, resilient demand for defensive needs-led healthcare assets continues to underpin M&A activity, particularly for high-quality platforms with strong earnings visibility.
“In 2024, deal activity increased into 2025, with strong Q1 volumes and solid year-end closings, reflecting momentum from prior pipelines. However, activity declines into 2026, with a weaker Q1 indicating a slower deal execution with economic uncertainty and ongoing cost and regulatory pressures in healthcare.”