The medical technology industry is expected to continue facing significant growth challenges over the next few years as increased competition, an increasingly stringent regulatory and policy environment, and continued concerns about rising healthcare costs and buyer consolidation are all expected to significantly impact the sector. These challenges will be most exacerbated in mature segments of the industry, such as hospital equipment, orthopedics and cardiovascular where pricing pressures are expected to increase, most particularly in traditional markets such as the United States and Europe.
To address their growth challenges, Med Tech companies will have to increasingly turn to M&A to complement internal efforts.
Trading multiples in the industry, however, have generally expanded over the last several years, most particularly in the United States, Europe and Japan. The EBITDA multiple for top performing companies jumped 88% from 9.4x to 17.6x, while the EBITDA multiple for the remainder of the industry increased 42% from 11.0x to 14.5x, based on KYBORA’s internal research.
Companies in the sector must become more sophisticated in exploring M&A opportunities by focusing on disciplined value-creation deals in mature markets, geographic expansion deals into emerging markets with faster growth, and business model transformation deals in traditional segments (allowing companies to offer integrated solutions vs. single products to customers).
KYBORA can help you achieve these objectives by leveraging our network of MedTech professionals around the globe. If you have any needs in MedTech M&A, please reach out to us.