The PE-Backed Exit Landscape in Healthcare & Life Sciences
PE ownership in healthcare and life sciences is often characterised by accelerated growth, operational transformation, and a focus on building scalable, sustainable businesses. Exits represent the culmination of this journey and the realisation of investment returns, but the path is rarely straightforward. Regulatory scrutiny, evolving reimbursement models, and the need for robust clinical and commercial leadership all add layers of complexity. PE investors and management teams must ensure that businesses are not only financially attractive but also operationally resilient and strategically positioned for future growth. Achieving this requires a holistic approach to exit readiness, encompassing governance, talent, compliance, and culture.
Market Trends and Key Challenges in Private Equity Exits
Recent years have seen global healthcare private equity deal value reach $115 billion in 2024, the second-highest on record, with several transactions exceeding $5 billion (Bain & Company, 2025). However, the total number of deals declined by 7.6%, from 1,135 in 2023 to 1,049 in 2024 (Private Equity Stakeholder Project, 2025). Life sciences exits generated nearly a quarter more value in 2024 than in 2023, despite fewer exits (Moss Adams, 2024), while overall healthcare exit deal value fell from $247 billion in 2023 to $200.8 billion in 2024 (Preqin, 2024). The average PE holding period reached a 20-year high of 7.1 years in 2023, reflecting a greater focus on leadership stability and value creation (Kirby Bates Associates, 2024).
Preparing for exit in these sectors involves navigating several key challenges. Regulatory and compliance risks are ever-present, as buyers scrutinise adherence to industry standards, data privacy laws, and clinical governance. Any gaps can significantly impact valuation or derail a deal. The quality of leadership is another critical value driver; investors and acquirers seek evidence of a high-performing executive team with a clear succession plan, as over-reliance on a founder or key individual can be a red flag. Operational scalability is essential, as PE-backed businesses are often in rapid expansion phases, and demonstrating that systems and teams can scale with growth is vital for attracting premium valuations. Cultural alignment is also crucial, as mergers, acquisitions, and IPOs can disrupt organisational culture, and ensuring resilience is key for post-exit integration and long-term success.
Steps to a Successful Private Equity Exit
Successful exit preparation begins early, ideally from the outset of PE ownership. Establishing clear objectives, timelines, and roles ensures stakeholder alignment, and regular communication between the PE sponsor, board, and management team is crucial. A robust leadership team is the cornerstone of exit readiness, and independent assessments help identify strengths, gaps, and development needs. Succession planning for all critical roles reduces key person risk and reassures potential buyers.
Thorough reviews of operational processes, regulatory compliance, and risk management frameworks are essential, with proactive attention to any deficiencies and ensuring documentation is audit-ready. Articulating a compelling growth story, supported by robust data and market insights, and highlighting differentiators such as proprietary technology or market access can further enhance buyer interest. Retention strategies for key talent, including incentives and communication plans, foster a culture of transparency and adaptability, preparing teams for the changes that come with new ownership.
