Perspectives
Key Themes in Medical Device Outsourcing and Manufacturing
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Criticality of technical capabilities, high growth segments and customer bases
Strategic buyers and PE firms are increasingly targeting acquisitions with 1) technical complexity, whether in design and engineering and / or manufacturing; 2) exposure to high-growth sub-segments; and 3) high-quality customer bases. In today’s macroeconomic environment, investors are discerning and seek acquisitions with differentiated services and product portfolios. |
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Investing in complementary capabilities with unique expertise
Complementary capabilities are driving strategic buyer interest, while niche expertise can boost valuation. For example, automation expertise that can be leveraged across existing operations can drive efficiencies and unlock increased synergies. |
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Enhanced importance of supply chain resiliency
The pandemic-era supply chain disruptions continue to underscore the need for strategic resiliency in procurement. Global dynamics such as tariff fluctuations and geopolitical events impact medical device outsourcing businesses to various degrees. While investors expect this, companies with scalable operations and vertical integration are generally better positioned to weather these uncertainties. |
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Shifting geography preferences
Low-cost manufacturing is nothing new in the sector. However, geopolitical and economic volatility have heightened investor interest in geographies that provide both low-cost operational benefits and reduced political risks, such as India. Although some U.S.-based manufacturers are exploring onshoring opportunities, significant operational shifts are unlikely to materialize in the short term. |
Recent Lincoln Momentum
Despite increased diligence scrutiny in M&A processes, attractive assets can still attain strong outcomes. Consolidation opportunities remain in the sector, and M&A volume is predicted to rebound once overall market uncertainty improves. Reach out today to discuss themes in the medical device outsourcing space or to learn more about Lincoln’s recent transactions.
Lincoln’s expertise and deep market knowledge are reflected in the success of several recent transactions, including:
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