Medical Devices Outsourcing and Manufacturing Momentum
| The outsourced medical device market continues to attract strong investor interest despite sector challenges, such as the destocking trends seen in 2023-2024 and persistent geopolitical uncertainty, slowing deal activity. High levels of capital to deploy, combined with maturing investments, are driving private equity appetite. Similarly, strategic investors are continuing to execute on their M&A growth plans and pursue synergistic transactions.
Lincoln International’s dedicated medical devices team leverages deep expertise and robust industry relationships to deliver successful outcomes in this dynamic market. Lincoln’s recent transactions reflect four key trends shaping the medical device outsourcing market. |
Summary
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Lincoln International discusses key trends shaping the medical device outsourcing market.
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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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Contributors
Related Perspectives
Meet Professionals with Complementary Expertise in Healthcare
It’s extremely rewarding to work in one of the largest and most diverse global business sectors helping support clients to realize their goals.
Matthew Lee
Managing Director, Head of UK & Co-head of Healthcare, Europe
London
I enjoy working closely with clients to overcome challenging situations and to develop strategies to meet their business goals.
Dirk-Oliver Löffler
Managing Director & Co-head of Healthcare, Europe
Frankfurt
My goal is to bring the best of Lincoln to each and every transaction, ensuring the topmost outcomes for our clients.
Roderick O’Neill
Managing Director & Co-head of Healthcare
New York
