with a third of respondents expecting to execute at least 10% more deals than in 2024. Despite challenges such as high valuations and competition for limited high-value assets, HCLS investors surpassed deal activity targets in 2024, driven by innovation in artificial intelligence, weight-loss drugs, and consumer health growth.

AI is expected to play a critical role in shaping deals in 2025, especially in diagnostics and medical devices, with nearly 80% of medical device investors anticipating AI capabilities in their targets. Key investment drivers include operational efficiency, platform expansion, and the development of new products or services. Strategic partnerships and creative financing will likely spur biopharma deals, while reimbursement pressures remain a significant challenge in healthcare services. KPMG highlights the importance of robust diligence processes to ensure seamless integrations and sustained value creation. The report highlights a dynamic investment landscape, with innovation and strategic acquisitions set to transform the HCLS sector in the coming year.

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