While deal volume in gastroenterology has declined—down from 27 deals in 2022 to just 11 in 2024—the fundamentals for consolidation remain strong. KPMG’s Q1 2025 report makes one thing clear: GI remains a highly fragmented, growth-ready specialty that continues to attract private equity and strategic buyers.
What’s driving this evolution?
- Favorable tailwinds: Rising GI disease prevalence, aging demographics, and strong reimbursement dynamics create steady patient volumes.
- High-margin ancillary services: Practices offering in-house anesthesia, pathology, infusion, ASC services, and imaging are more attractive to investors.
- Private equity momentum: Major players like GI Alliance, Gastro Health, and United Digestive have undergone multiple recapitalizations, with more “second bites” expected.
- Strategic scaling: Smaller groups are merging to centralize RCM, HR, and IT functions—boosting margins and meeting MACRA reporting demands.
- Platform activity remains strong: Despite fewer deals, headline acquisitions like Cardinal Health’s $3.9B pending buy of GI Alliance signal renewed confidence.
Why this matters:
The drop in deal count doesn’t signal weakness—it reflects a maturing landscape where quality, not quantity, defines activity. Practices that modernize and offer scalable infrastructure are best positioned to capitalize on future waves of consolidation.