KPMG’s Healthcare M&A Practice Gains Edge with Physician Leadership

The Firm

NEW YORK — KPMG International reported $39.8 billion in globally aggregated revenues for the fiscal year ending September 30, 2025, a 5.1 percent increase in local currency terms and 5.4 percent in U.S. dollars over FY24. Global headcount grew 1.8 percent to 276,030. The firm operates in 142 countries and territories. By revenue and headcount, KPMG is the smallest of the Big Four.

KPMG’s U.S. member firm, KPMG LLP, is headquartered in New York. The global organization is structured as a network of independent member firms operating under the KPMG name, coordinated through KPMG International, a Swiss entity based in Amstelveen, the Netherlands. The structure means the U.S. team operates with full domestic accountability while drawing on cross-border resources from the broader network.

Tax and Legal Services led FY25 growth at 7.5 percent. Audit grew 6.0 percent. Advisory, which houses Deal Advisory & Strategy, grew 2.9 percent. Growth came across all three regions: Americas up 5.6 percent, Asia Pacific and EMA each up 4.7 percent.

In February 2025, KPMG launched KPMG Law US, becoming the first Big Four firm to operate a U.S. law practice. The Arizona Supreme Court approved the firm under that state’s alternative business structure rules on February 27, 2025. KPMG Law US cannot serve KPMG audit clients but is positioning to integrate legal services with the firm’s tax and advisory work, including post-deal contract integration on M&A engagements.

Deal Advisory & Strategy

KPMG’s Deal Advisory & Strategy practice is structured as an integrated team across four service lines: Transaction Strategy, Transaction Services (financial due diligence), Restructuring, and Performance Improvement. The practice runs on what KPMG calls the deal architect model. A single partner is accountable across every diligence workstream, synthesizing findings before they reach the buyer’s investment committee.

Deal architect. The model is intended to keep teams focused on the value drivers underpinning the buyer’s investment thesis. KPMG describes the goal as reducing value leakage, accelerating value creation, and creating continuity from pre-deal through post-deal phases. For ABA platform transactions, where the thesis often depends on assumptions about clinical scalability, market density, payer diversification, and operational standardization across acquired practices, single-point accountability across financial, operational, and strategic diligence improves how findings hold together by the time they reach the IC.

Transaction Services delivers quality of earnings analysis, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) assessment, net working capital review, and cash flow sustainability evaluation. The practice runs under Steve Sapletal, US Strategy Leader for Deal Advisory & Strategy, who has been involved in over 500 transactions across more than 30 years.

Healthcare M&A Under a Physician

Ross Nelson, M.D., MBA, serves as Principal and Healthcare Deal Advisory & Strategy Leader at KPMG LLP. His medical background lets him evaluate healthcare deals through both a financial and a clinical lens. The question shifts from whether earnings are sustainable to whether the clinical model producing those earnings is sound, scalable, and aligned with quality standards. Among the Big Four, KPMG is the only firm with a physician in this role.

The H1 2025 KPMG healthcare M&A report documented 415 transactions, a modest 1.0 percent decline in deal volume from H2 2024. Deal value, however, surged 56.0 percent, reflecting an appetite for larger, more strategic transactions. Strategic buyers accounted for 60.2 percent of volume; PE activity remained resilient despite tighter credit markets.

“Smart optimism must be matched by smarter diligence, especially in a market where margin compression and innovation are rewriting the rules.” — Ross Nelson, M.D., Principal, Healthcare Deal Advisory & Strategy Leader, KPMG LLP (2025)

The framing translates directly to ABA. Rate cuts in North Carolina and Indiana, accreditation mandates in Indiana and Massachusetts, and an active OIG audit series have produced precisely the kind of margin-compression dynamic that physician-led diligence is built to test. The HHS Office of Inspector General announced in 2022 it would audit Medicaid ABA payments in seven states. Four reports are out: Indiana, Wisconsin, Maine, and Colorado.

The Indiana audit identified at least $56 million in improper Medicaid ABA payments. Wisconsin: at least $18.5 million. Maine: at least $45.6 million. Colorado: $285.2 million in improper or potentially improper payments. In each completed audit, all 100 sampled enrollee-months included payments for one or more claim lines that were improper or potentially improper. The findings centered on documentation deficiencies, credentialing gaps, and supervision shortfalls, the same operational categories a physician-led diligence team would test in pre-acquisition review.

KPMG’s 2026 Healthcare & Life Sciences Investment Outlook, released in January 2026, drew on a survey of 500 industry executives across eight subsectors. The report flagged continued behavioral health interest among PE buyers despite reimbursement pressure, framing the sector as one where scalable platforms with clinical integration and regional density continue to attract capital. The report also noted four-year highs in healthcare IT deal volume and value, a category that increasingly intersects with ABA through electronic health record platforms, claims analytics, and outcomes measurement systems.

Where KPMG Fits in ABA Diligence

KPMG’s positioning in ABA M&A mirrors the rest of the Big Four. The firm is concentrated at the large-cap end of the market, engaged by institutional PE sponsors and strategic acquirers on platform transactions. Fee structure and resource model are calibrated for engagements where deal complexity and size justify Big Four pricing. In the mid-market, KPMG is more likely to be retained for a specific workstream (tax structuring, regulatory diligence, integration advisory) than as the primary QofE provider.

The clinical lens is the differentiator in healthcare deals. For ABA targets, that means evaluating supervision adequacy, treatment intensity appropriateness, clinical documentation quality, and the alignment of clinical practice with accreditation standards now mandated in Indiana and Massachusetts. A physician-led perspective can flag undersupervision, inappropriate treatment protocols, or documentation patterns inconsistent with delivered services. A financial-only diligence team typically does not.

KPMG also leans on tech-enabled diligence. The firm has deployed data-extraction technology that interprets images, charts, and complex visualization files in a data room. For ABA transactions, where clinical documentation, prior authorization records, and billing data are stored across electronic health record systems with varied export formats, the technology compresses the timeline for the financial and operational analysis.

Implications for ABA Stakeholders

For practice owners. KPMG’s involvement in a transaction signals a large-cap, institutional buyer running a structured diligence process. Owners should expect questions that extend beyond financial performance to include clinical model evaluation, supervision compliance, and treatment quality assessment.

For PE sponsors. The combination of the deal architect model and physician-led healthcare diligence offers a differentiated lens on ABA platform deals. Sponsors evaluating targets in states with active regulatory reform should weigh KPMG’s emphasis on the intersection of margin compression and quality standards.

For the industry. KPMG’s H1 2025 finding that deal value surged 56 percent while volume modestly declined points to a market moving toward fewer, larger, more strategic transactions, consistent with the ongoing consolidation of ABA platforms by well-capitalized sponsors.

KPMG’s H2 2025 healthcare M&A trends report is expected later in 2026. Three more state audits in the OIG’s seven-state ABA series remain pending.

AT A GLANCE

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