Global Healthcare Private Equity Report

Playing the Long Game in Pharma Services

While uncertainty persists, many investors have focused on gem assets and attractive subsectors, with an eye toward value creation.

By the Healthcare Private Equity Team

First published on enero 08, 2026
min read


Executive Summary Pharma services has historically been resilient and attractive for private equity investment, driven by long-term secular tailwinds. The market has been buffeted by funding pressures, lower clinical trial volumes, policy and budget uncertainty, and a valuation gap between sellers and buyers. Though transaction value rose in 2025 to a record high, in part due to a few scale gem assets, deal volume slightly decreased year over year. Leading investors are seeking out differentiated assets and emphasizing scale, revenue visibility, and selective platform and tuck-in plays to lean into value creation. This article is part of Bain's 2026 Global Healthcare Private Equity Report. Explore the report Pharma services investments have long benefited from consistent demand, propelled in large part by the pharma industry’s reliance on specialized contract research organizations (CROs), contract development and manufacturing organizations (CDMOs/CMOs), and outsourced commercialization services to provide efficiency, flexibility, and specialized expertise. These fundamentals have supported private equity (PE) deal activity and performance even through cycles of market choppiness. The sector’s resilience was evident in 2022 and 2023: While overall healthcare PE activity softened during this period, pharma services transaction value and deal volume remained steady (see Figure 1). Figure 1 Pharma services activity, historically resilient, has lagged the broader healthcare market in recent years Note: Based on announcement date; includes announced deals that are completed or pending, with data subject to change; deal count and deal value exclude add-on deals below $250 million; 2025E represents actual data through November 30, 2025, annualized for the rest of the year Sources: Dealogic; AVCJ; Bain analysis Pharma services investment growth has slowed However, the momentum of 2022 and 2023 has moderated, as pharma services volume has declined at a roughly 11% compound annual growth rate from its peak in 2023, while the rest of healthcare PE has seen volume increase at an 11% CAGR in the same period. This moderation reflects a combination of headwinds facing the sector, including decreased biotech funding and fewer clinical trial starts, policy and trade developments that raise uncertainty, pricing pressures on pharma companies, and valuation gaps between buyers and sellers. In the US, venture capital for biotech and pharma companies has moderated to pre-2021 levels, reflecting a normalization following the highs of 2020 and 2021 (see Figure 2). Additionally, global clinical trial starts, particularly in early-stage and drug discovery programs, have followed a similar trend, returning gradually to pre-pandemic levels and tempering demand for pharma services. Figure 2 Venture capital funding for US pharma and biotech companies has declined since 2021 Note: Deal count includes all venture capital transactions, including new and follow-on rounds Source: PitchBook Data, Inc Meanwhile, policy and trade developments—think US tariffs, the One Big Beautiful Bill Act, the BIOSECURE Act, vaccine policy, and most-favored-nation drug pricing reform—have heightened uncertainty around global pharma supply chains and pricing frameworks. In response, pharma services transactions have targeted areas more insulated from policy shocks, such as CRO/site networks, manufacturing, and businesses with limited exposure selling into US markets. Large pharma companies also face constrained budgets as macro uncertainty—amplified by pricing pressures, upcoming loss of exclusivity cycles, and Inflation Reduction Act pressures in the US—has hurt financial performance. In turn, these constraints have limited investment in nonessential outsourced services, affecting the growth performance of pharma services vendors broadly (see Figure 3). Figure 3 R&D spending has risen over time, though it flattened in recent years Note: R&D spending only includes public companies, typically in later-stage programs and not new biotech; top 20 rankings determined by reported 2024 revenue; other firms refers to public small and mid-sized firms Source: EvaluatePharma Finally, a gap persists between seller and buyer valuation expectations, as most assets purchased during the peak years of multiples between 2021 and 2022 remain in fund portfolios. Although average transaction multiples have declined since then, they are still above pre-pandemic levels. Combined with broader end-market softness, this contributed to a decline in sponsor-to-sponsor transactions, which was especially evident in 2023, although sponsor-to-sponsor activity rebounded in 2024 and 2025 (see Figure 4). Figure 4 Sponsor-to-sponsor activity surged in 2025 following a valuation-gap-driven dip in 2023 Note: Based on announcement date; includes announced deals that are completed or pending, with data subject to change; deal count and deal value exclude add-on deals below $250 million; 2025E represents actual data through November 30, 2025, annualized for the rest of the year; sum of bar segments may not equal 100% due to rounding Sources: Dealogic; AVCJ; Bain analysis The year 2025 was the largest on record for pharma services on a value basis. This was led by Bain Capital, Kohlberg, Mubadala, and Partners Group’s investment in PCI Pharma Services, a CDMO deal that accounted for more than one-third of the year’s value. Two other important North American transactions were THL Partners’ acquisition of Headlands Research, a KKR-owned clinical trial site network, and BayPine’s acquisition of CenExel Clinical Research, another clinical trial site network, from Webster Equity Partners. These three North American deals reflect the ongoing appetite for large-scale, high-quality service platforms. In Europe, investors have targeted players with strengths in niche categories. Renaissance Partners and Aurora Growth Capital acquired Genetic, a dossier developer, from CVC Capital Partners, while EQT acquired Adalvo, another dossier developer, from Aztiq. And in Asia-Pacific, Temasek and GIC’s investment in Novotech, a CRO, alongside existing investor TPG, was a highlight in an otherwise slower year for pharma services activity in the region. Further, many large-scale exits underscore continued strategic interest in high-quality pharma services businesses, exemplified by Thermo Fisher Scientific’s acquisition of Clario Holdings from a shareholder group led by Nordic Capital and Astorg. Megan Preiner, a managing director of THL Partners’ Healthcare Services Team, discusses broader trends in pharma services investing and how THL gains conviction on value creation in the space with Kara Murphy, coleader of Bain’s Healthcare Private Equity team. Investment strategies for a shifting environment Pharma services investors are making use of several approaches to adjust to current headwinds: A barbell approach targeting scale and potential. First, investors are emphasizing premium assets offering scale and clear differentiation. Second, investors seek under-optimized or subscale platforms where operational improvement can unlock meaningful growth. A focus on business models and markets relatively insulated from volatility. In a reversal of a trend seen in the late 2010s, investors are scanning for companies with greater customer exposure to large pharma sponsors rather than early-stage biotech. Another desirable trait is strong revenue visibility, as with long-duration programs. US-based infrastructure deals resistant to policy change or with limited cross-border exposure may also look attractive. And finally, buyers are eyeing carve-outs and public-to-private transactions, concentrating on assets that could benefit from improved operational execution. A structured playbook to pressure-test deal assumptions and develop value-creation plans. Leading investors are developing methodical scenarios to test risk limits; build conviction in value-creation levers across top-line growth, AI-driven operational efficiency, and strategic mergers and acquisitions; and secure investment committee approval even amid macro and policy shifts. Pharma services remains exposed to secular tailwinds that remain attractive over the long term, and leading investors have continued to find strong opportunities despite recent underlying challenges. As market conditions evolve, a persistent and disciplined approach will continue to drive sustained returns. Read our 2026 Global Healthcare Private Equity Report DOWNLOAD THE PDF Explore the report More from the report Healthcare Private Equity Market 2025: Resurgence and Record Growth What Differentiates Winning Healthcare IT Investments New Models of Value Creation for Physician Groups Playing the Long Game in Pharma Services

Executive Summary

Pharma services has historically been resilient and attractive for private equity investment, driven by long-term secular tailwinds.
The market has been buffeted by funding pressures, lower clinical trial volumes, policy and budget uncertainty, and a valuation gap between sellers and buyers.
Though transaction value rose in 2025 to a record high, in part due to a few scale gem assets, deal volume slightly decreased year over year.
Leading investors are seeking out differentiated assets and emphasizing scale, revenue visibility, and selective platform and tuck-in plays to lean into value creation.

Pharma services investments have long benefited from consistent demand, propelled in large part by the pharma industry’s reliance on specialized contract research organizations (CROs), contract development and manufacturing organizations (CDMOs/CMOs), and outsourced commercialization services to provide efficiency, flexibility, and specialized expertise. These fundamentals have supported private equity (PE) deal activity and performance even through cycles of market choppiness. The sector’s resilience was evident in 2022 and 2023: While overall healthcare PE activity softened during this period, pharma services transaction value and deal volume remained steady (see Figure 1).

visualization — Pharma services activity, historically resilient, has lagged the broader healthcare market in recent years

Pharma services investment growth has slowed

However, the momentum of 2022 and 2023 has moderated, as pharma services volume has declined at a roughly 11% compound annual growth rate from its peak in 2023, while the rest of healthcare PE has seen volume increase at an 11% CAGR in the same period. This moderation reflects a combination of headwinds facing the sector, including decreased biotech funding and fewer clinical trial starts, policy and trade developments that raise uncertainty, pricing pressures on pharma companies, and valuation gaps between buyers and sellers.

In the US, venture capital for biotech and pharma companies has moderated to pre-2021 levels, reflecting a normalization following the highs of 2020 and 2021 (see Figure 2). Additionally, global clinical trial starts, particularly in early-stage and drug discovery programs, have followed a similar trend, returning gradually to pre-pandemic levels and tempering demand for pharma services.

Meanwhile, policy and trade developments—think US tariffs, the One Big Beautiful Bill Act, the BIOSECURE Act, vaccine policy, and most-favored-nation drug pricing reform—have heightened uncertainty around global pharma supply chains and pricing frameworks. In response, pharma services transactions have targeted areas more insulated from policy shocks, such as CRO/site networks, manufacturing, and businesses with limited exposure selling into US markets.

Large pharma companies also face constrained budgets as macro uncertainty—amplified by pricing pressures, upcoming loss of exclusivity cycles, and Inflation Reduction Act pressures in the US—has hurt financial performance. In turn, these constraints have limited investment in nonessential outsourced services, affecting the growth performance of pharma services vendors broadly (see Figure 3).

Finally, a gap persists between seller and buyer valuation expectations, as most assets purchased during the peak years of multiples between 2021 and 2022 remain in fund portfolios. Although average transaction multiples have declined since then, they are still above pre-pandemic levels. Combined with broader end-market softness, this contributed to a decline in sponsor-to-sponsor transactions, which was especially evident in 2023, although sponsor-to-sponsor activity rebounded in 2024 and 2025 (see Figure 4).

The year 2025 was the largest on record for pharma services on a value basis. This was led by Bain Capital, Kohlberg, Mubadala, and Partners Group’s investment in PCI Pharma Services, a CDMO deal that accounted for more than one-third of the year’s value. Two other important North American transactions were THL Partners’ acquisition of Headlands Research, a KKR-owned clinical trial site network, and BayPine’s acquisition of CenExel Clinical Research, another clinical trial site network, from Webster Equity Partners. These three North American deals reflect the ongoing appetite for large-scale, high-quality service platforms.

In Europe, investors have targeted players with strengths in niche categories. Renaissance Partners and Aurora Growth Capital acquired Genetic, a dossier developer, from CVC Capital Partners, while EQT acquired Adalvo, another dossier developer, from Aztiq. And in Asia-Pacific, Temasek and GIC’s investment in Novotech, a CRO, alongside existing investor TPG, was a highlight in an otherwise slower year for pharma services activity in the region.

Further, many large-scale exits underscore continued strategic interest in high-quality pharma services businesses, exemplified by Thermo Fisher Scientific’s acquisition of Clario Holdings from a shareholder group led by Nordic Capital and Astorg.

Megan Preiner, a managing director of THL Partners’ Healthcare Services Team, discusses broader trends in pharma services investing and how THL gains conviction on value creation in the space with Kara Murphy, coleader of Bain’s Healthcare Private Equity team.

Investment strategies for a shifting environment

Pharma services investors are making use of several approaches to adjust to current headwinds:

A barbell approach targeting scale and potential. First, investors are emphasizing premium assets offering scale and clear differentiation. Second, investors seek under-optimized or subscale platforms where operational improvement can unlock meaningful growth.
A focus on business models and markets relatively insulated from volatility. In a reversal of a trend seen in the late 2010s, investors are scanning for companies with greater customer exposure to large pharma sponsors rather than early-stage biotech. Another desirable trait is strong revenue visibility, as with long-duration programs. US-based infrastructure deals resistant to policy change or with limited cross-border exposure may also look attractive. And finally, buyers are eyeing carve-outs and public-to-private transactions, concentrating on assets that could benefit from improved operational execution.
A structured playbook to pressure-test deal assumptions and develop value-creation plans. Leading investors are developing methodical scenarios to test risk limits; build conviction in value-creation levers across top-line growth, AI-driven operational efficiency, and strategic mergers and acquisitions; and secure investment committee approval even amid macro and policy shifts.

Pharma services remains exposed to secular tailwinds that remain attractive over the long term, and leading investors have continued to find strong opportunities despite recent underlying challenges. As market conditions evolve, a persistent and disciplined approach will continue to drive sustained returns.