Five Deal-Term Trends Healthcare M&A Participants Should Watch in 2026

By: Alfonso Zambrano and Dustin Abresch
 
The 2026 SRS Acquiom M&A Deal Terms Study provides a useful snapshot of how private-company acquisition terms are evolving. The study analyzes more than 2,300 private-target acquisitions, valued at more than $569 billion, that closed between 2020 and 2025. For healthcare M&A participants, the broader market data points to a familiar conclusion: deal terms are becoming more customized, more diligence-driven, and more sensitive to post-closing risk.

That matters in healthcare because transaction risk is rarely limited to ordinary business performance. Buyers and sellers must also account for reimbursement stability, provider retention, licensure, payor audits, privacy and cybersecurity, fraud and abuse laws, and an expanding patchwork of state healthcare transaction notice requirements. As a result, familiar deal tools such as earnouts, representations and warranties insurance (RWI), escrows, working capital adjustments, and special indemnities often carry added significance in healthcare transactions.

Earnouts remain one of the most important tools for bridging valuation gaps. According to the SRS study, 24% of 2025 non-life-sciences deals included an earnout. In healthcare transactions, earnouts are often used where future performance depends on provider retention, payor mix, referral patterns, reimbursement rates, or successful integration after closing. The key negotiation point is not simply the amount of the earnout. Sellers should focus on who controls the business after closing, whether the buyer must operate the business in a manner that supports achievement of the earnout, how expenses are allocated, and whether indemnity claims may be offset against future earnout payments.

RWI also continues to influence deal structure. SRS reported that RWI was identified on approximately 46% of 2025 deals in its study. RWI can be useful because it may reduce the need for large seller escrows and allow sellers to receive more proceeds at closing. But in healthcare deals, RWI does not eliminate the need for careful risk allocation. Insurers, buyers, and counsel continue to focus heavily on billing and coding, HIPAA and privacy, licensure, DEA registration, Medicare and Medicaid compliance, provider credentialing, payor recoupments, and fraud and abuse exposure. Known issues, excluded matters, and highly regulated risks may still require special indemnities, closing conditions, covenants, or purchase price adjustments.

The market also remains more nuanced than a simple shift toward seller-friendly “walk-away” indemnity structures. Although no-survival and limited-recourse structures remain relevant, the latest data suggests buyers continue to seek meaningful protection. SRS reported that 88% of private-target deals included an escrow or holdback, and that 11% of traditional indemnity deals had seller general representations that did not survive closing. In healthcare transactions, buyers are often reluctant to rely solely on general market constructs because regulatory and reimbursement liabilities can be difficult to quantify and may surface after closing.

Working capital adjustments are another area where healthcare deals require precision. SRS reported that 39% of working capital purchase price adjustments were calculated using a “worksheet approach,” reflecting a broader preference for specified methodologies rather than generic accounting standards alone. In healthcare transactions, the working capital target can be materially affected by aged accounts receivable, payor disputes, reimbursement reserves, inventory valuation, patient credits, accrued provider compensation, and potential refund or recoupment obligations. For both buyers and sellers, the working capital methodology should be treated as an economic term, not boilerplate.

Finally, diligence preparedness increasingly affects leverage. A seller that can support its revenue, compliance history, provider relationships, payor arrangements, cybersecurity practices, and disclosure schedules is usually better positioned to resist broad escrows, special indemnities, and burdensome closing conditions. Conversely, incomplete diligence materials often give buyers a basis to seek additional protections, renegotiate economics, or delay closing.

The practical takeaway is straightforward: healthcare M&A deal terms are doing more work than ever. Earnouts, RWI, escrows, working capital adjustments, and diligence covenants are not merely technical provisions. They are the mechanisms parties use to price and allocate healthcare-specific risk. Whether representing a buyer, seller, private equity sponsor, family office, or referral source, the best results often come from identifying those risks early and translating them into clear, tailored deal terms.

To learn more, connect with Alfonso Zambrano for guidance on mergers and acquisitions, corporate transactions, and healthcare M&A matters. A Shareholder and Director in Brown & Fortunato’s Corporate Group, Alfonso represents business owners, investors, and private equity groups in complex asset and stock acquisitions, joint ventures, and financings, with particular emphasis on healthcare transactions involving DME companies, pharmacies, and other healthcare providers. Reach out at (806) 345-6354 or azambrano@bf-law.com to discuss how he can help support your transaction goals.

For practical, business-focused legal guidance on mergers and acquisitions, healthcare transactions, and corporate governance matters, connect with Dustin Abresch, JD. An attorney in the Corporate and Transactions Group at Brown & Fortunato, Dustin represents clients in the purchase and sale of pharmacies, healthcare companies, and other privately held businesses, with a focus on drafting and negotiating transaction documents and guiding deals from letter of intent through closing. Reach out at (806) 345-6327 or dabresch@bf-law.com to learn how she can support your business and transaction goals.

This article is for informational purposes only and does not constitute legal advice or establish an attorney-client relationship. This article was prepared on a specific date, and the law may have changed since it was written. You should contact your attorney to obtain advice with respect to your specific legal issue and needs.

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