Health care M&A in motion: Regulation, strategy and investor focus

The health care mergers and acquisitions (M&A) and capital markets landscape remains ever-changing and dynamic, shaped by evolving regulations, shifting investor (i.e., financial sponsor or private equity) priorities and ongoing demand for scalable care delivery models. Several states are now introducing or debating new regulations tied to financial-sponsor investment in health care practices, adding a new layer of oversight to how transactions are structured and approved. Yet, as capital often does, it continues to find specific pockets and subverticals within health care where growth opportunities remain strong. In this environment, financial sponsors are conducting deeper diligence on practices and companies before closing a deal — evaluating compliance, governance and operational scalability with greater rigor than ever.
Here are some perspectives on the evolving health care M&A market.

Clint Bundy: Several states are now moving to review or regulate private-equity investment in health care. How are these developments shaping today’s M&A environment?

Stewart Carlin: We are clearly in a more regulated and closely watched market than in years past. Oregon’s Senate Bill 95, along with comparable laws now enacted in several states, signals a clear shift toward greater state oversight of who can own or invest in health care entities. For practices and platforms, this means compliance readiness must begin earlier in the transaction process. Buyers are asking not just “Can we close this transaction?” But, “How will this ownership model withstand scrutiny a year from now?”

The result is longer diligence timelines, but also stronger alignment between operators and capital partners. Well-run groups that invest early in governance, physician alignment and transparent financial reporting are rising to the top. In behavioral health, for instance, sponsors are increasingly focused on verifying compliant supervisory structures and clean credentialing documentation before closing. The additional oversight has, in many ways, become a healthy forcing mechanism for quality.

Clint Bundy: What strategic options are available to practice owners who are evaluating partnership or liquidity paths?

Stewart Carlin: There is no universal playbook. The right path depends heavily on the owner’s vision, timing and the maturity of their organization. That said, options continue to include partnerships with strategic acquirers, financial sponsors, health systems and individual buyers, each bringing a distinct set of benefits and trade-offs.

Across Bundy Group’s work in health care, we are seeing several consistent trends:

• In physician practice management, particularly within dermatology and aesthetics, the market is shifting from broad roll-ups to specialized platforms that integrate medical and cosmetic care. Financial sponsors are helping groups blend clinical credibility with consumer sophistication through investments in brand strategy, analytics and compliance infrastructure. The most successful partnerships scale patient experience and governance in equal measure, protecting both culture and reputation as they grow.
• In tech-enabled health care services, investors continue to target recurring, compliance-critical platforms that improve efficiency across the care continuum. Software-driven businesses such as remote monitoring, revenue cycle management automation and digital compliance solutions deliver measurable return on investment and high retention. Specialized service providers supporting hospitals and health systems, including biomedical equipment management, workflow optimization and data-integration platforms, are drawing similar attention for their essential, contract-based revenue.
• In behavioral health, founders are increasingly evaluating partnerships with scaled platforms that provide access to payer contracting leverage, workforce development infrastructure and digital tools to enhance clinician productivity.

A recent Bundy Group transaction in behavioral health illustrates this dynamic. A founder-led, multistate applied behavior analysis therapy provider sought a partner to support de novo expansion and infrastructure investment. Through a structured process, we identified a sponsor whose portfolio included both health care operations and technology services companies. The cultural and operational fit, combined with the ability to scale responsibly, ultimately drove the transaction’s success.

Clint Bundy: Which health care markets continue to attract investor attention despite policy and regulatory headwinds?

Stewart Carlin: Investor interest remains strong across both traditional clinical models and tech-enabled services that deliver recurring, compliance-driven value. Companies that improve revenue integrity, patient engagement and workflow efficiency are being viewed less as vendors and more as essential infrastructure enabling scalable, high-performing care delivery.

Behavioral health also continues to be a durable investment sector, supported by structural demand, improving reimbursement frameworks and the use of technology to enhance care coordination and quality.

Even with heightened oversight, M&A activity remains robust. Investors are still deploying capital, but the emphasis has shifted toward structure, governance and operational excellence rather than pure growth rate. Investors continue to differentiate between growth stories and well-built operators that can scale responsibly in a regulated market, a theme we see consistently across Bundy Group’s health care transactions.

Health care services financial sponsors deal count by year (2017 through June 2025)

Clint Bundy: Looking ahead, what is your outlook for the health care services sector in 2026?

Stewart Carlin: The outlook remains positive for well-run, compliant and scalable operators. The next phase of health care M&A will reward those that combine clinical quality with data visibility, including integrated reporting, strong key performance indicators and disciplined operational management.

Private equity groups and strategic acquirers will continue to pursue physician-led and recurring service businesses that improve access, efficiency and patient experience. However, investors are increasingly discerning. They want partners that can demonstrate sustainable economics and robust compliance infrastructure, not just top-line growth.

Ultimately, success in 2026 will depend on preparation and positioning. Owners who know their objectives, understand their options and engage with advisers who can clearly articulate their value proposition will be best positioned to achieve successful outcomes. In today’s environment, sophistication and transparency are not simply advantages; they are essential.

Bundy Group is a boutique investment bank that specializes in representing health care practices in business sales, capital raises and acquisitions. Over the past 36 years, Bundy Group has advised and closed on over 250 transactions, which include numerous physician practice management-related transactions.

Clint Bundy is a managing director of Bundy Group, specializing in advising practice owners in business sales, capital raises and acquisitions.

Stewart Carlin has more than a decade of investment banking and corporate finance experience, and he is based out of Bundy Group’s New York office.

Bundy Group Securities, LLC, is a registered broker-dealer and member of FINRA and SIPC. This content is for informational purposes only and is not intended as investment advice or a recommendation to buy or sell any security.