2026 Healthcare Investment Themes: PwC

As deal activity normalizes, and valuations from the 2020-21 cycle remain elevated, investors are increasingly turning to alternative transaction structures to unlock value. These dynamics signal a maturing cycle – one defined less by a surge in volume and more by diversification of deal structures, creative capital deployment, and renewed discipline around value creation. With traditional buyouts still constrained by lingering valuation mismatches, 2026 is shaping up to be a year defined by strategic creativity.

Divestitures / Carve-out opportunities:

2026 Cycle Signal: Moderate/High Momentum

After years of portfolio expansion and cross-sector integration, large healthcare and life sciences players are refocusing on category leadership. This drove a pronounced rise in divestiture and carve-out activity through 2023-2024, as corporates sold non-core assets to redeploy capital into higher-growth segments and protect margins. For private equity, these carve-outs remain attractive entry points into high-quality assets with clear operational and strategic upside.

Looking ahead to 2026, divestiture activity is expected to remain a steady contributor to deal flow, but without the sharp acceleration seen in the prior two years. Divestiture sentiment in 2025 showed continued growth, but at a more measured pace, suggesting the market is shifting from a wave of obvious portfolio clean-ups to a more targeted, strategic pruning cycle. In 2026, most activity is likely to come from select segments where corporates still face margin pressure or strategic misalignment.

Take-privates

2026 Cycle Signal: Moderate

With public markets at or near all-time highs, the headline effect is counterintuitive: a stronger equity market widens the valuation gap between well-performing public assets and those whose multiples haven’t kept pace with fundamentals. That can create a pocket of opportunity for sponsors to take public companies private at relative discounts — particularly in MedTech, where operational complexity, portfolio sprawl, and muted growth often leave assets trading below intrinsic value.

Looking ahead to 2026, take-privates are poised to be a meaningful, and potentially growing, part of the deal mix. The combination of elevated public indices, uneven multiple expansion, and continued portfolio simplification may underpin activity. This activity is likely to be selective rather than broad-based, concentrated in segments where operational turnarounds, carve-outs, or digital enablement can materially shift earnings trajectories.

Continuation Vehicles

2026 Cycle Signal: High

Continuation Vehicles are gaining traction as private equity investors seek to hold high-performing assets beyond the natural life of their funds, while offering liquidity to existing LPs. In healthcare, they’ve become a preferred mechanism for retaining exposure to resilient, cash-generative businesses in CROs, CDMOs, and healthcare services — sectors with strong growth but limited near-term exit options.

Looking to 2026, we expect continuation vehicles to remain a meaningful approach to deal making as LPs increasingly seek liquidity. These structures may also open the door to fresh value-creation planning – particularly for assets that would be mispriced in today’s still-choppy exit markets.