Selling in a Normalized Market: What 2026 Means for Healthcare Practice Owners

A look at the market, what's driving valuations, and what commands a premium today — with a closer look at behavioral health.

By RiverPark Partners  |  June 2026  |  9-minute read

KEY TAKEAWAYS

•     Healthcare M&A activity remains historically high even after a few slower years — and in Q1 2026, momentum turned positive for the first time since late 2023.

•     Valuations have normalized from their peak rather than collapsed; well-run practices still command attractive multiples.

•     Behavioral health continues to draw strong interest from both strategic acquirers and private-equity investors.

•     Buyers pay premiums for durability — scale, a team-based care model, diversified reimbursement, and management depth.

•     The single biggest value driver is preparation: owners who build durability before going to market consistently achieve stronger outcomes.

If you own a healthcare practice, what's happened in the deal market over the past few years matters — but mostly for what it tells you about your options today. And right now, the conditions are favorable for well-run owners. The slower years that followed the 2021 peak weren't a collapse so much as a reset, and that reset is exactly what's created today's opening: healthcare M&A momentum turned positive again in early 2026, capital is abundant, financing has loosened, and a backlog of buyers who sat out the rate-hike years is finally moving. Behavioral health, in particular, remains one of the steadiest performers in the market. For owners who've built something durable, that backdrop means a real chance to find the right partner, on the right terms, and be well rewarded for what you've created.

The Market: Where the Deals Are

Start with the shape of the market. Across the first quarter of 2026, healthcare services accounted for the overwhelming majority of deal activity — 386 of 549 announced transactions. Physician and medical groups led by a wide margin, followed by outpatient facilities and home health. Behavioral and mental health, long treated as a niche, is now a permanent fixture on every buyer's screen.

Figure 1 — Q1 2026 announced healthcare services deals by subsector. Source: PitchBook.

Behavioral health, in particular, has graduated from “emerging” to “established.” Stigma has faded, payers have expanded coverage, and demand is structural rather than cyclical. That demand profile is exactly what long-term capital wants to underwrite: it doesn't swing with the economy, and it's underserved relative to need. Strategic and private-equity buyers alike are building platforms in mental health, autism and ABA therapy, substance-use treatment, and integrated primary-behavioral models.

Why the Conditions Favor Sellers

The single most common question we hear from owners is some version of: “Didn't I miss the window?” The answer, supported by the data, is no. What actually happened is that valuations normalized from an unsustainable peak — they didn't collapse. The market simply returned to a healthy, defensible range that buyers can finance and sellers can still be happy with.

Figure 2 — Median EV/EBITDA multiples have normalized, not collapsed. Source: PitchBook.

What This Means for a Lower-Middle-Market Practice

An important caveat: the headline multiples above — healthcare deals around 13x EBITDA, middle-market buyouts around 12x — are drawn from transactions of roughly $50 million to $1 billion. Practices in the lower middle market trade at a discount to these figures, and that is normal, not a knock on your business. It reflects the “size premium”: larger companies command higher multiples because buyers see them as more stable, easier to integrate, and less dependent on any one person. The encouraging part is that the size premium is not a fixed ceiling — it's a runway. Because it is real and measurable, it shows exactly where the upside lives, and many of the moves that lift a practice into a stronger valuation bracket are within an owner's near-term control: improving provider utilization, shifting toward higher-margin care, adding service lines, sharpening payer contracting, and ramping new clinicians to full productivity. An owner who builds that scale and durability before a sale doesn't just grow earnings — they earn a higher multiple on those earnings.

Beyond where multiples have settled, three forces are converging to make 2026 a good time to transact:

•      A wall of capital that has to move: Private equity is sitting on an estimated $2.5 trillion of dry powder globally, and a large share of healthcare-focused funds are now in vintages where they must deploy or return capital — creating motivated, well-priced buyers.

•      Rates have turned the corner: With the cost of debt easing off its highs, leveraged buyers can underwrite deals more aggressively than in 2023–2024 — which flows directly into the price they can pay you.

•      A backlog of pent-up demand: Deals shelved during the rate-hike years didn't disappear; they queued. Strategics are back, add-on activity is brisk, and continuation vehicles give funds new ways to hold and add to winning platforms.

Figure 3 — What healthcare PE investors say is driving the 2026 rebound. Source: McDermott Will & Schulte HPE conference poll.

You can see this momentum in the headlines: Universal Health Services' acquisition of Talkspace is a clear signal that large operators want scaled behavioral and virtual-care assets, not just tuck-ins. When deep-pocketed strategics compete with financial sponsors for the same practices, sellers benefit.

What Commands a Premium

Here's where many owners undervalue themselves: buyers in 2026 are not chasing raw top-line growth the way they did five years ago. They're paying premiums for durability — earnings that are predictable, defensible, and not dependent on any single person. Scale is the clearest example. As a behavioral health practice grows from a single-provider operation into a true platform, its multiple steps up meaningfully, because larger groups are more resilient, easier to integrate, and command pricing power.

Figure 4 — Indicative 2026 behavioral health TEV/EBITDA by practice size. Source: RiverPark Partners analysis of PitchBook comparables.

Connected Care Is Now a Value Driver

Picture a behavioral health group where psychiatrists, nurse practitioners, physician assistants, and therapists work as one coordinated team rather than as solo providers sharing an office. To a clinician, that's simply good medicine. To a buyer, it is a balance sheet of durability: the business doesn't hinge on any one founder, care stays consistent through vacations and turnover, and patients stay because they feel looked after. That continuity is what turns a collection of appointments into recurring, defensible revenue — and recurring, defensible revenue earns a premium multiple.

So what, specifically, are buyers underwriting in a group like that — and where can an owner build value before going to market? These are the levers that most reliably move the multiple, and most are simply good business whether or not you ever sell:

•      Team-Based, Scalable Operating Model – Buyers place a premium on practices that are built to operate beyond the founder. Clinically, the strongest organizations leverage physicians across a coordinated team of advanced practice providers and therapists, expanding access, improving utilization, and maintaining consistent quality of care. Operationally, buyers look for a proven leadership layer beneath ownership—such as clinical, operational, and billing managers—that can sustain performance through a transition. The less dependent the business is on any one individual, the more valuable and scalable it becomes in the eyes of acquirers.

•      Demonstrable quality of care and outcomes: Quality used to be impossible to price; today it is measurable. Buyers look for outcome tracking, high retention and satisfaction, low no-show rates, strong supervision, and accreditation. These metrics signal durable demand and protect against reimbursement clawbacks and the shift toward value-based contracting, where getting paid depends on proving results.

•      Diversified, well-managed payer relationships: This is the most scrutinized area in diligence right now. After the Change Healthcare disruption and ongoing Medicaid uncertainty, buyers run forensic reviews of receivables. Being in-network across several commercial payers, carrying a balanced mix rather than leaning on one contract, and showing clean credentialing and strong collections de-risks the underwriting — and lower risk converts directly into a higher price. A book weighted toward commercial payers with a healthy slice of self-pay is especially attractive; single-payer concentration or a thin Medicaid margin is the fastest way to see a buyer chip the multiple.

•      Scale and a multi-state footprint: This is where the size premium becomes tangible. Multi-state licensure, payer enrollment, and the compliance infrastructure behind them are genuinely hard to build — so a group that already operates cleanly across state lines is worth more because it spares the buyer years of that work. Even getting from one state to two, done properly, can re-rate a business.

•      The ability to attract and retain clinical talent: Behavioral health runs on people, and there are not enough providers to go around. A practice that reliably recruits and keeps clinicians — through strong culture, real mentorship, sensible NP/PA leverage, and ideally a training pipeline — is worth materially more, because the buyer knows the platform can be staffed as it scales. Chronic turnover or a single hard-to-replace provider reads as a growth ceiling.

•      Clean, quality-of-earnings-ready financials: Accrual-based books, documented add-backs, and defensible margins. Nothing builds buyer trust — or compresses diligence — faster, and nothing erodes value faster than financials that fall apart under a quality-of-earnings review.

•      Technology, data, and compliance infrastructure: A modern EHR, telehealth, outcomes tracking, and increasingly AI-enabled workflow are no longer optional — investors now poll technology as a top sector catalyst. Paired with clean licensing and regulatory hygiene, this keeps a deal on track through diligence and protects full value at the finish line.

What Gives Buyers Pause

Diligence is as much about risk as strengths. The flip side of the value drivers above is a short list of concerns that can slow a process or chip the price — and most are fixable well before you go to market:

•      Founder dependency: A business whose revenue and relationships hinge on one person is the most common reason a multiple gets discounted or an earn-out gets longer.

•      Payer concentration: Heavy reliance on a single contract — or a thin Medicaid margin — reads as fragile in today's reimbursement climate.

•      Provider shortages and turnover: Difficulty recruiting or retaining clinicians signals a ceiling on growth and raises questions about culture and continuity.

•      Reimbursement and regulatory pressure: Exposure to rate changes, plus billing, credentialing, or compliance loose ends, all surface quickly under a buyer's review.

•      Weak financial controls and thin management depth: Cash-basis books, undocumented add-backs, or a leadership team that is really just the owner make a buyer work harder — and pay less.

The encouraging takeaway is that nearly every one of these concerns is fixable well before you go to market — and the same moves that reassure a buyer also make the business stronger and more valuable whether or not you ever sell.

Where This Leaves You

Put the pieces together, and a clear picture emerges. Deal volume is historically high, even after a few flat years; valuations have normalized into a healthy and financeable range, capital is plentiful and motivated to move, and buyers are rewarding exactly the qualities that good operators have spent years building. Behavioral health sits at the center of all of it — backed by structural demand that doesn't swing with the economy and a need that still outpaces supply.

For most owners, a sale is ultimately how you capture the value you've spent years building — and in a market like this one, a well-prepared sale is rewarded. Selling isn't strictly all-or-nothing: a recapitalization or growth partnership can let you take meaningful chips off the table while staying involved and protecting the care model you've built. But those are variations on the same decision, not a reason to wait — the preparation that drives a great outcome is the same in every case.

Looking ahead, these conditions look durable rather than fleeting. That record pile of private-equity capital doesn't get returned to investors by sitting still — it has to be deployed, and aging fund vintages mean the pressure to do so builds over the next several years. Financing has loosened, the strategics that pulled back are competing for assets again, and the shift of care into outpatient and virtual settings keeps pulling investment toward community-based behavioral health. Consolidation here is still early; most of it lies ahead.

The practical implication is the same regardless of when you eventually transact: the best outcomes come from preparation, not from timing the market perfectly. In our experience, owners who begin preparing 6 to 18 months ahead consistently achieve better results — they understand their value, close the gaps, and build durability into the business, which lets them choose their moment, their partner, and their terms. Those who wait until an unsolicited offer lands end up reacting to someone else's timeline — and usually leave value on the table by doing so.

How RiverPark Partners Can Help

Not every conversation about a transaction needs to start with a process. Many of the most successful engagements begin years before a business is brought to market. Understanding how buyers view your practice today can help prioritize the operational, financial, and strategic initiatives that create value over time. If you'd like an objective perspective on your practice, your valuation, or your strategic options, we'd be happy to share our thoughts in a confidential discussion.

To start the conversation, reach out to Lucas Gielen at lgielen@riverparkib.com.

Sources & Notes

Deal counts and valuation multiples: PitchBook private and public market data, Q1 2026. Rebound catalyst poll: McDermott Will & Schulte Healthcare Private Equity (HPE) New York conference, late 2025. Behavioral health comparables are indicative ranges based on RiverPark Partners' analysis of PitchBook transaction comparables. Figures are illustrative and not investment advice; RiverPark Partners is not a financial or legal advisor to the reader.