December 15, 2025 – Solganick has published its latest mergers and acquisitions (M&A) and VC funding update report on the Healthcare IT and Digital Health sectors. The report covers a year to date overview on the latest M&A transactions, valuation and public company tables, market maps, artificial intelligence in healthcare funding and trends. The report covers a breadth of healthcare software, IT services and digital health companies, of which Solganick has completed several M&A transaction in these industry sectors.

You can download the complete report here: Solganick HCIT M_A Update – December 2025

Here are the highlights:

The Healthcare IT (HCIT) and Digital Health sectors have entered a phase of “Selective Scale” in YTD 2025. Following the valuation reset of 2023-2024, the market has stabilized, driven by a resurgence in strategic consolidation and a return of private equity deployment. While deal volume has remained flat relative to H1 2024, deal value has surged, indicating a flight to quality and a preference for platform assets over point solutions.

Key Highlights YTD 2025:

Valuation Recovery: Premium assets (Rule of 40+) are once again commanding double-digit EBITDA multiples (12x–15x+), while “growth-at-all-costs” unprofitable assets remain compressed.

The AI Premium: Validated AI infrastructure (not just wrappers) is driving the highest valuation premiums, particularly in Revenue Cycle Management (RCM) and clinical documentation.

Services Consolidation: A wave of mergers among Managed Service Providers (MSPs) focused on healthcare verticals is creating new mid-market giants capable of handling complex security and compliance needs.

We are seeing the following Key Market Drivers (for M&A):

Consolidation of Point Solutions: Hospital CIOs are fatigued by vendor sprawl. 2025 has seen a massive push for “platform” acquisitions where larger incumbents acquire smaller point solutions to bundle services (e.g., Luma Health acquiring Tonic).

Private Equity “Buy & Build”: PE firms are aggressively merging mid-sized MSPs to create dominant healthcare-specific service providers. The “platform” strategy is back, with sponsors seeking assets with >$10M EBITDA to act as consolidators.

Cybersecurity Mandates: Following high-profile breaches in 2024, healthcare organizations are pouring budget into managed security. This has made MSSPs with healthcare compliance expertise (HIPAA/HITRUST) prime M&A targets.

Solganick Outlook for 2026:

We expect M&A velocity to accelerate in 1H 2026. The “bid-ask” spread between buyers and sellers has narrowed significantly. Founders have accepted the new valuation reality, and PE firms are sitting on record dry powder that must be deployed. Expect to see:

• More Public-to-Private deals for undervalued HCIT small-caps.
• RCM Consolidation as a primary theme to combat provider labor shortages.
• Cybersecurity becoming a non-negotiable diligence item, driving premiums for secure platforms.

AI Market Overview: The “Augmented Reality” of 2025

In YTD 2025, Artificial Intelligence has decoupled from the broader healthcare IT and digital health market, establishing itself as the primary driver of both venture capital volume and strategic M&A premiums. While generalist healthcare IT and digital health funding remains cautious, AI-native infrastructure—specifically Generative AI for clinical documentation and Autonomous Revenue Cycle Management (RCM)—is attracting “mega-rounds” ($100M+) and premium acquisition multiples.

The 2025 Shift:

• From Pilot to Platform: Hospital CIOs are moving past isolated AI pilots. 2025 has been defined by the adoption of enterprise-scale AI “operating systems” (e.g., Ambience, Commure) that integrate multiple point solutions (scribing, coding, CDI) into a single layer.
• The “Copilot” Standard: The “Human-in-the-loop” model has solidified as the regulatory and operational standard. Purely autonomous clinical decision-making tools are seeing slower adoption compared to “augmentative” tools that reduce administrative burden.
• Pharma’s Generative Bet: Big Pharma has aggressively partnered with or acquired generative biology platforms to compress drug discovery timelines, shifting capital from traditional CROs to “TechBio” platforms.
• Artificial Intelligence is a now central theme to all investment, partnership and M&A decisions.

About Solganick

Solganick is a data-driven investment bank focused exclusively on software and technology services companies. The Healthcare IT M&A practice is one of its leading industry sector coverage areas for the firm. Since 2009, Solganick has completed over 200 M&A transactions with fast growing and established technology clients.

For more information or to inquire about an M&A opportunity, please contact us.