Global Healthcare M&A and Capital Markets Q1 2023 Review

Global Healthcare M&A Q1 2023: Return of ‘Big-Ticket’ Deals

The global healthcare market witnessed a surge of deals in Q1 2023 as dealmakers returned with the intention to stay ahead of the deal curve. The COVID-19 knock-on effects, labor force displacement, geopolitical unpredictability, and liquidity scarcity that dominated talks last year appear to have subsided. As a result, deal making was relatively higher, compared to a partially muted Q1 2022. Additionally, operational, and financial pressures have driven business to look for transformative partnerships. The ability to identify, negotiate and realize value from increasingly complex partnerships and alternative collaboration models has become an important competitive advantage.

The sector witnessed numerous ‘big ticket’ agreements as well as solid deal closures, both of which are expected to revive investors’ confidence and set the tone for the remainder of the year. The volume of deals withdrawn during the quarter was extremely low, a stark contrast to last year which saw deals taken off the market on account of geo-political and economic uncertainties. Dealmakers continue to amend their strategies to bridge the valuation gaps. They are conducting deeper analyses of the targets, thereby extending duration of negotiations and due diligence. Considering these developments, we expect the following themes to impact M&A sentiments:

       Portfolio realignment is happening among the strategics to divest non-core or under-performing assets; the proceeds of which are expected to be used in ramping of R&D, technology, and scale.

       There is a rapid paradigm shift towards utilising data and actionable insights to implement person-centric network strategies across sub-sectors

       Uncertain geopolitical environment and higher interest cycle continues to put pressure on justifying synergies and ROIs

       Sponsors being cautious and revising their expectations to factor in the changing deal-making landscape with lower valuations justifying ‘firepower’ deployment during the year

       Continued focus on ramping up digital capabilities


Arjun Paul
Manager, Corporate and Investment Banking LoB Posts

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