Medical Device Manufacturing Industry

Q3 2022: Mergers and Acquisitions Trend Report

Industry Overview

• One of Medical Device Manufacturing Sector’s largest transactions in Q3 2022 occurred as CVS Health announced the pending acquisition of Signify Health for $8.0 billion.
• The overall outlook for the Medical Device Manufacturing sector is positive. Experts state that there is significant competition, technological change, and innovation.
• Medical Device Manufacturing industry products are essential for healthcare delivery. Therefore, there is a cushion for significant revenue volatility in the industry.
• The key external drivers of Medical Device Manufacturing are federal funding and the demand from adults aged 65 and older.

Key Industry Trends

• Medical device demand is driven by aging population in the United States, technological advancements, and other sophisticated economies. Demand is expected to continue to increase to 2027.
• Industry sales of cardiovascular and neurological devices, as well as equipment used to treat age and obesity-related health problems, will likely rise accordingly.
• The rising demand is driving the creation of new products and rapid technological progress, such as the development of 3D bio-printed devices.
• The Inflation Reduction Act and the CHIPS for America Act incentivize increased manufacturing, especially within the U.S.
• Rising regulation and consolidation, in contrast, is expected to increase business operations abroad.

Recent M&A Transactions

Historical Performance

• Due to COVID-19, many people sought to avoid hospitals out of fear of contracting or spreading the virus. As a result, industry revenue declined 3% in 2020. Due to constrained market conditions in established markets, players will likely direct focus towards lucrative developing countries.
• Over the past five years, the Medical Device industry revenue has been volatile. Medical Device technological advancements are driving growth, though general economic conditions are contributing to y/y volatility.

Future Industry Growth

• Growth in the Medical Device market is expected to increase over the six years to 2027 due to increased demand following an at-home healthcare trend.
• Demand for medical devices is expected to recover following the pandemic and easing of inflation.
• Technological developments, data analytics, and unmet healthcare demands will likely bolster industry growth.