Thomas Allen, Practice Transitions Group's Founder, shares his perspective on the evolving healthcare practice market and what owners can expect in 2026.
The Market Evolution: 2025 in Review
Global M&A value reached $3.0 trillion in 2025, up 31% from 2024, according to BCG's M&A Outlook 2026. Most of that activity landed in the second half of the year, which ran 40% ahead of the first half. Deal counts barely moved, at roughly 33,000 deals against 33,800 in 2024 and 41,300 at the 2021 peak.
Healthcare deal value rose 68% in 2025 off a weak 2024, which BCG reads as a return to normal levels. Private equity deal value climbed 59%. Sponsors still held about $2 trillion in undeployed capital at year end.
The practice market followed the same shape. The 2021-2022 buying frenzy gave way to a slow 2023, when rising interest rates raised debt costs. Many dental service organizations (DSOs) and healthcare groups also absorbed the operational strain of rapid growth, and deals that might have attracted ten bidders in 2021 often saw half that number in 2023. Buyers never went back to the old pace. They came back more selective, with deeper due diligence and a closer look at integration risk.
Premium practices kept attracting strong interest and competitive valuations through that whole stretch. These standout practices typically feature strategic locations, clean financial records, strong earnings history, and business-minded leadership. Conversely, practices in secondary markets, those heavily reliant on single providers, or those with limited transition timeline availability still experience longer deal timelines.
Looking Ahead: The 2026 Landscape
BCG titled its 2026 outlook "Expectations Are High, Again." The numbers behind that title deserve a practice owner's attention. Inflation eased through 2025 and interest rates declined modestly. Corporate and private equity deal pipelines entered 2026 fuller than they had been in several years. BCG's M&A Sentiment Index for the Americas climbed from 68 in August 2025 to 91 by December, and BCG lists healthcare among the sectors poised for continued activity.
The year has largely delivered. In BCG's September 2026 update, healthcare deal value was up 74% through the first eight months of the year. Healthcare sentiment reached 100, the long-term average for the whole market, and only financial institutions scored higher.
The $2 trillion in dry powder cuts two ways for practice owners. Sponsors face pressure from their investors to put that money to work, which keeps buyers in the market, and they face equal pressure to sell what they already own. BCG cites a median holding period of 5.3 years for US companies private equity sold in 2025, up from 4.3 years in 2020. Many of the groups that bought aggressively in 2021 and 2022 are now approaching their own recapitalizations, and that timing will shape who is buying, how they integrate, and how they price.
The market is also expanding beyond traditional dental-only groups, with private equity firms taking a more holistic view of healthcare investments. MedSpa and plastics sectors are gaining significant momentum, and cross-vertical opportunities are emerging. Well-managed groups continue to attract premium valuations, highlighting the importance of operational excellence.
Market conditions keep widening the distinction between strong and weak operators. Successful groups maintain their acquisition pace, while those still carrying 2021-era debt costs and operational challenges are falling behind. Practice support capabilities and track records of successful integrations have become critical factors in valuations.
BCG's view is that the bottleneck has moved from capital to execution. Buyers have the money, and what they lack are transaction-ready assets that can clear at a workable valuation. The peak multiples of 2021-2022 may not return. A practice that is ready to transact is exactly what this market is short of, and strategic buyers remain willing to pay a premium for it.
What Practice Owners Should Consider for 2026
For practice owners considering a sale or partnership, these factors will be crucial for success:
- Ensure clean financials and strong operations
- Research potential buyers' operational track records and where they sit in their own fund cycle
- Prepare for thorough due diligence
- Consider market timing carefully
- Maintain strong staff retention and patient satisfaction
- Document consistently strong earnings
- Build relationships with potential strategic partners
- Keep equipment and technology current
The healthcare practice market continues to offer attractive opportunities, but success increasingly depends on proper preparation and finding the right partner match. While valuations remain strong for well-run practices, buyers are more focused than ever on sustainable operations and clear growth potential.
The most successful transitions will come from practices that maintain operational excellence while preparing thoughtfully for a potential transaction. Work with experienced advisors who understand both the clinical and business aspects of your practice to maximize your opportunities in this market.
