Global Healthcare Private Equity Report

What Differentiates Winning Healthcare IT Investments

Amidst continued high-valuation multiples and competitive deal processes, a disciplined focus on value-creation levers distinguishes winning bids and successful exits.

By the Healthcare Private Equity Team

Published on 一月 08, 2026
min read


At a Glance Healthcare IT remains a top-performing segment for investors, outpacing the rest of healthcare and most other industries. Leading investors are achieving Rule of 60 outcomes through pricing and packaging, cross-selling, and AI-enabled growth and margin expansion, as end-user adoption is no longer enough to generate strong returns. Consistent, disciplined focus on value creation, from underwriting to exit, sets apart the highest-returning deals. Generative AI offers top- and bottom-line value creation opportunity for healthcare IT providers—as well as possible downside risk to be navigated. This article is part of Bain's 2026 Global Healthcare Private Equity Report. Explore the report Healthcare IT (HCIT) continues to attract private equity (PE) investment through varied macroeconomic conditions, supported by strong fundamentals. Returns have outpaced other subsectors within healthcare since 2017 (see Figure 1). Meanwhile, deal volumes have remained robust, accounting for nearly 20% of healthcare transactions in 2025 compared with 15% in 2021, underscoring increasing investor interest (see Figure 2). Figure 1 Investment returns in healthcare IT have historically outperformed the rest of healthcare Source: SPI by StepStone as of December 2025 Figure 2 Robust transaction activity underscores healthcare IT’s durability against macro uncertainty Notes: Based on announcement date; includes announced deals that are completed or pending, with data subject to change; excludes 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 Several flagship transactions stand out in 2025, a year that proved strong for large-scale, tailored systems of record across payers, providers, and life sciences. In North America, a few headliners include Warburg Pincus selling a majority interest in ModMed (provider IT)—a specialty-focused electronic medical records (EMR) provider—to Clearlake Capital and Bain Capital acquiring HealthEdge from Blackstone and merging it with HealthProof (payer IT). In Europe, Bain Capital invested in Softway Medical Group, a health information system and EMR provider based in France. In Asia, several notable transactions involved revenue cycle management (RCM) platforms with a strong presence in India, including Blackstone’s acquisition of AGS Health from EQT and New Mountain Capital’s investment in Access Healthcare, which, combined with SmarterDx and Thoughtful.ai, formed Smarter Technologies, an AI-enabled RCM platform. Of late, top-performing HCIT businesses are being measured against a high bar on both growth and profit. Historically, the Rule of 40—an operating measure suggesting that the sum of a company’s annual revenue growth and EBITDA margin should surpass 40%—has been a high-level gauge of performance for software businesses. While a tall order, top-performing HCIT businesses now exceed 60% on this metric (see Figure 3), raising the question of whether the Rule of 60 will become the new standard. Figure 3 The Rule of 60 is emerging as the new Rule of 40 for HCIT investments Note: Data is from 2022–2023 or 2023–2024, whichever is the latest available Sources: Company filings; Bain analysis A sector poised for continued robust deal activity Healthcare IT is expected to remain active for investors, reflecting both secular tailwinds and a healthy pipeline of deal opportunities. A recent Bain publication with KLAS noted that IT remains a key priority for both providers and payers (see Figure 4). Fueling this trend has been increased billing complexity, workflow digitization, interoperability, and value-based care. Additionally, the pipeline of attractive assets is expected to remain robust as many sponsor-owned businesses approach the end of their typical holding periods (see Figure 5). Figure 4 IT remains a top priority for providers and payers, with budgets continuing to increase Note: Sum of bar segments may not equal 100% due to rounding Sources: Bain Provider and Payer HCIT Survey 2025 (n=228); KLAS Research Figure 5 More sponsor-owned healthcare IT businesses are approaching the end of their holding periods Notes: For time in portfolio for 2024, 0–3 years means the investments were made in 2021 onward; 4–6 years means the investments were made in 2018–2020; and 6+ years means the investments were made prior to 2018; 2025 bar includes data as of September 30, 2025 Source: PitchBook Data, Inc Emerging trends to create value While transaction volume remains strong, the nature of value creation in HCIT is changing. A decade ago, growth most often relied on accelerating end-user adoption of technology, as seen, for example, in the rapid adoption of EMR systems following passage of the 2009 HITECH Act in the US. Today’s value-creation playbook is different. As valuation multiples remain high, PE funds are increasingly underwriting one or more value-generating strategies as part of their base-case scenario. Notable trends include: using generative AI products or internal workflow technology to drive revenue growth or reduce costs, as well as to future-proof the business from downside risk and disruption; developing a comprehensive pricing and packaging program to drive upsell opportunity via product/feature bundling and secure continued like-for-like pricing uplift; expanding upsell and cross-sell go-to-market strategies to enable sales teams and better manage pipeline opportunities; and leveraging mergers and acquisitions to position portfolio companies for growth acceleration or achieve significant cost synergies. Successful deals require disciplined focus on value creation across the deal life cycle to ensure that the value identified during diligence translates into strong momentum and performance when it comes time to exit. Paul Moskowitz, a leader in HCIT investing at Bain Capital, discusses how value creation is evolving in the face of shifting market conditions with Kara Murphy, coleader of Bain’s Healthcare Private Equity team. Notably, generative AI is emerging as both a key value driver and a source of risk for HCIT businesses. This emerging technology offers opportunities to streamline back-end processes to achieve cost savings and facilitate new product development to drive revenue expansion. As end users continue to adopt generative AI across clinical and administrative workflows alongside a range of development partners (see Figure 6), incumbent healthcare IT companies are increasingly challenged to strengthen their existing foothold with end users through generative AI or risk losing their positioning to AI-native disrupters. Figure 6 End users are obtaining AI solutions from a variety of sources Notes: RCM is revenue cycle management; sum of bar segments may not equal 100% due to rounding Source: Bain Generative AI Survey, January 2025, US respondents (n=408) To thrive in this “new normal,” HCIT companies must play on the offensive: embedding generative AI-powered efficiency and innovation into their workflows and product development while adjusting pricing and packaging in parallel. At the same time, they must be prepared to go on the defensive by anticipating and adapting to business model shifts and pricing pressures. For investors, these dynamics must remain top of mind throughout diligence and during the holding period. Looking ahead, we expect healthcare IT to continue to attract strong interest from financial sponsors. But as penetration curves mature and the market becomes more competitive, sponsors will need to place an even greater emphasis on value creation and downside risk mitigation, especially in relation to generative AI, to achieve Rule of 60 results and compelling returns. Read the Next Chapter New Models of Value Creation for Physician Groups 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

At a Glance

Healthcare IT remains a top-performing segment for investors, outpacing the rest of healthcare and most other industries.
Leading investors are achieving Rule of 60 outcomes through pricing and packaging, cross-selling, and AI-enabled growth and margin expansion, as end-user adoption is no longer enough to generate strong returns.
Consistent, disciplined focus on value creation, from underwriting to exit, sets apart the highest-returning deals.
Generative AI offers top- and bottom-line value creation opportunity for healthcare IT providers—as well as possible downside risk to be navigated.

Healthcare IT (HCIT) continues to attract private equity (PE) investment through varied macroeconomic conditions, supported by strong fundamentals. Returns have outpaced other subsectors within healthcare since 2017 (see Figure 1). Meanwhile, deal volumes have remained robust, accounting for nearly 20% of healthcare transactions in 2025 compared with 15% in 2021, underscoring increasing investor interest (see Figure 2).

visualization — Investment returns in healthcare IT have historically outperformed the rest of healthcare

Several flagship transactions stand out in 2025, a year that proved strong for large-scale, tailored systems of record across payers, providers, and life sciences. In North America, a few headliners include Warburg Pincus selling a majority interest in ModMed (provider IT)—a specialty-focused electronic medical records (EMR) provider—to Clearlake Capital and Bain Capital acquiring HealthEdge from Blackstone and merging it with HealthProof (payer IT). In Europe, Bain Capital invested in Softway Medical Group, a health information system and EMR provider based in France. In Asia, several notable transactions involved revenue cycle management (RCM) platforms with a strong presence in India, including Blackstone’s acquisition of AGS Health from EQT and New Mountain Capital’s investment in Access Healthcare, which, combined with SmarterDx and Thoughtful.ai, formed Smarter Technologies, an AI-enabled RCM platform.

Of late, top-performing HCIT businesses are being measured against a high bar on both growth and profit. Historically, the Rule of 40—an operating measure suggesting that the sum of a company’s annual revenue growth and EBITDA margin should surpass 40%—has been a high-level gauge of performance for software businesses. While a tall order, top-performing HCIT businesses now exceed 60% on this metric (see Figure 3), raising the question of whether the Rule of 60 will become the new standard.

A sector poised for continued robust deal activity

Healthcare IT is expected to remain active for investors, reflecting both secular tailwinds and a healthy pipeline of deal opportunities. A recent Bain publication with KLAS noted that IT remains a key priority for both providers and payers (see Figure 4). Fueling this trend has been increased billing complexity, workflow digitization, interoperability, and value-based care. Additionally, the pipeline of attractive assets is expected to remain robust as many sponsor-owned businesses approach the end of their typical holding periods (see Figure 5).

Emerging trends to create value

While transaction volume remains strong, the nature of value creation in HCIT is changing. A decade ago, growth most often relied on accelerating end-user adoption of technology, as seen, for example, in the rapid adoption of EMR systems following passage of the 2009 HITECH Act in the US.

Today’s value-creation playbook is different. As valuation multiples remain high, PE funds are increasingly underwriting one or more value-generating strategies as part of their base-case scenario. Notable trends include:

using generative AI products or internal workflow technology to drive revenue growth or reduce costs, as well as to future-proof the business from downside risk and disruption;
developing a comprehensive pricing and packaging program to drive upsell opportunity via product/feature bundling and secure continued like-for-like pricing uplift;
expanding upsell and cross-sell go-to-market strategies to enable sales teams and better manage pipeline opportunities; and
leveraging mergers and acquisitions to position portfolio companies for growth acceleration or achieve significant cost synergies.

Successful deals require disciplined focus on value creation across the deal life cycle to ensure that the value identified during diligence translates into strong momentum and performance when it comes time to exit.

Paul Moskowitz, a leader in HCIT investing at Bain Capital, discusses how value creation is evolving in the face of shifting market conditions with Kara Murphy, coleader of Bain’s Healthcare Private Equity team.

Notably, generative AI is emerging as both a key value driver and a source of risk for HCIT businesses. This emerging technology offers opportunities to streamline back-end processes to achieve cost savings and facilitate new product development to drive revenue expansion. As end users continue to adopt generative AI across clinical and administrative workflows alongside a range of development partners (see Figure 6), incumbent healthcare IT companies are increasingly challenged to strengthen their existing foothold with end users through generative AI or risk losing their positioning to AI-native disrupters.

To thrive in this “new normal,” HCIT companies must play on the offensive: embedding generative AI-powered efficiency and innovation into their workflows and product development while adjusting pricing and packaging in parallel. At the same time, they must be prepared to go on the defensive by anticipating and adapting to business model shifts and pricing pressures. For investors, these dynamics must remain top of mind throughout diligence and during the holding period.

Looking ahead, we expect healthcare IT to continue to attract strong interest from financial sponsors. But as penetration curves mature and the market becomes more competitive, sponsors will need to place an even greater emphasis on value creation and downside risk mitigation, especially in relation to generative AI, to achieve Rule of 60 results and compelling returns.

Read the Next Chapter

New Models of Value Creation for Physician Groups