What 2026 Will Demand from Medtech Leadership in M&A
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Having endured another year of uneven recovery, the medtech industry can now turn its attention to shaping strategies for 2026. As it does so, one theme has become increasingly clear—momentum alone is no longer a viable strategy.
For much of the past decade, growth in many cases masked inefficiency. Such illogic was easily overlooked, since some of these inefficiencies created go-forward EBITDA synergies in deal-making. Capital for the industry was relatively abundant, valuations were forgiving, and scale—real or anticipated—often mattered more than discipline. That era is now in the rear-view mirror. What lies ahead in 2026 is not a downturn, nor a return to the exuberance of 2021, but something more demanding: a market that rewards precision, preparedness, and validation.
For C-suite leaders—whether running OEMs, CDMOs, or venture-backed innovators—this shift is not about weathering macroeconomic headwinds or cruising on certain segment tailwinds, but rather adapting to a new operating reality where optionality must be earned, not assumed.
Although M&A in many medtech segments has been steady in recent years, transaction volumes have fallen overall, buyers have been more cautious, and sellers recalibrated expectations. The instinctive response for some was to wait—for valuations to recover, for buyers to re-engage, and for certainty to return.
Passivity, however, will not be rewarded in 2026. Strategic acquirers have returned to the market in force, but they are more selective, more analytical, and more integration-focused than before. Although private equity remains active—especially in medtech/healthcare—it has become far more disciplined regarding leverage, operational risk, and exit visibility. Capital certainly is available but only for businesses that can demonstrate a clear purpose and execution.
The question leaders should be asking is not “When will the market come back?” (because it never really left) but rather, “Are we structurally ready for the existing market?”
Operational Excellence is Rewarded
While a “good story” usually gains interest, one of the most notable shifts occurring in boardrooms and diligence processes alike is the diminished tolerance for narrative without evidence. Equity rollovers are the standard cure for growth companies with valuation gaps. Earnouts are not to be relied upon unless well crafted.
Growth stories still matter. Innovation still matters. But in 2026, operational credibility is the gating factor.
For medtech CDMOs, this means more than capacity and certifications. Buyers are scrutinizing customer concentration, program stickiness, automation readiness, and the ability to support customers across the product lifecycle—not just at launch. High-mix, low-volume capabilities can be powerful differentiators, but only when paired with repeatability and margin discipline.
For medtech OEMs and platform companies, the focus has shifted to commercial efficiency. Revenue quality, pricing durability, gross margin discipline, regulatory pathway clarity, and post-market obligations now carry as much weight as top-line growth. Leaders who cannot clearly articulate why profitable growth will persist—under tighter reimbursement, regulatory, or procurement conditions—will find themselves discounted accordingly.
In short, the market is no longer paying premiums for potential alone. However, premiums will still follow for the rare medtech breeds achieving top-line growth with all the aforementioned factors.
Overall, for 2026, M&A is resilient but it looks different. Despite headlines suggesting a sluggish deal environment, transaction activity is quietly rebuilding. What has changed is the way and the reason(s) deals are being conducted.
Large strategics are prioritizing bolt-on acquisitions that fill specific capability gaps—digital workflows, specialty manufacturing processes, geographic expansion, or access to innovation in their regulated end markets. Transformational acquisitions still occur, but they are rarer and far more deliberate. In fact, divestitures seem more common than large scale acquisitions that were previously prevalent in the industry.
Private equity, meanwhile, is increasingly focused on platform resilience. Funds are underwriting longer hold periods, placing greater emphasis on cash generation, and demanding clear paths to multiple expansion through growth and operational improvement—not financial engineering. We’ve seen examples of both and we can quickly spot the difference.
For sellers, this has two important implications: (1) Timing is less about market cycles and more about readiness; and (2) Preparation minimizes valuation risks.
Companies that invest early in data integrity, management depth, and strategic positioning will command attention regardless of macro conditions. Those that wait for “the perfect window” may find the window narrowing instead.
The difference between companies that attract interest and those that close transactions increasingly depends on how deliberately they prepare for scrutiny. As practitioners, we can confirm that executing a M&A deal is harder than drumming up interest for it. Expect that to continue in 2026.
Preparation Yields Dividends for the Disciplined
Consider the following case study of a mid-sized medtech CDMO specializing in high-mix, low-volume manufacturing for regulated devices. The business was technically strong, with deep customer relationships and consistently full order books. Yet when inbound M&A interest slowed in 2023–2024, the firm’s leaders’ first instincts were to wait—expecting that capacity constraints and demand recovery would eventually restore peak-cycle valuations.
But in closely examining the intrinsic value, management took a different path. Over the next 18 months, the company focused on de-risking the business from a buyer’s perspective. Customer concentration was reduced by design. Program-level margins were analyzed and addressed. Select automation investments were made—not to increase volume, but to improve repeatability and quality across similar build profiles. Just as importantly, a second layer of operational leadership was put in place to reduce founder dependency.
When strategic and private equity acquirers revisited the opportunity, the conversation shifted. The company was no longer viewed simply as a capacity solution, but as a scalable, system-driven partner. Integration concerns eased. And valuation multiples reflected the opportunity presented for both parties—a true win-win. The lesson was clear: the market rewarded preparation rather than capacity alone.
Another defining feature of the 2026 landscape is something we call the “credible second act.” Many medtech companies—particularly founder-led or private-equity-backed businesses—are entering a phase where their original growth engine has matured. The next phase may involve geographic expansion, adjacent indications, automation, or deeper integration into customer workflows. Each path carries risk, and buyers are rewarding execution and shying away from uncertainty.
What separates companies that attract premium outcomes from those that stall is not the ambition of the second act, but its credibility. Has management already taken the first steps? Are the investments measured and reversible? Is the roadmap grounded in customer demand rather than internal aspiration?
Leadership teams that treat strategic evolution as an operational discipline rather than a slide-deck exercise are the ones best positioned for both organic growth and inorganic opportunity.
One of the more understated yet critical trends likely to shape outcomes this year is leadership alignment as value drivers. In transactions that succeed—whether M&A, minority investments, or strategic partnerships—the management team presents a unified, realistic view of the business. Financials, strategy, and culture reinforce one another. There are no competing narratives between founders, executives, and sponsors.
Conversely, misalignment has become one of the fastest deal-killers. Differing views on growth expectations, reinvestment needs, or exit timing introduce friction that today’s buyers are unwilling to absorb. In one deal we helped orchestrate, the founder’s CapEx demands made the R.O.I. untenable. Buyers went from excited to “wait and see.” Fortunately, further roadmap planning determined the CapEx requirements were more aspirational than operational, which led to the right type of dealmaking—once that alignment was achieved.
For CEOs and boards, this underscores the importance of internal clarity. Alignment is no longer just a governance issue—it is a tangible driver of valuation and deal certainty. In advising leadership teams across the medtech ecosystem, our counsel is that 2026 will reward several common threads emerging among those best positioned for the year ahead:
Strategic focus over optional sprawl
Operational rigor over aspirational forecasts
Data transparency over polished narratives
Preparation over perfect timing
The companies that will thrive this year are not necessarily the fastest growing or the most visible. Contrarily, they are the ones that understand their role in the value chain, invest deliberately, and make decisions grounded in reality rather than hope. Hope continues to be a lousy strategy.
The medtech industry has always been resilient—innovation, clinical need, and demographic tailwinds ensure that. But resilience alone does not guarantee outcomes. As this new year begins, the most effective leaders will be those who treat uncertainty not as a reason to pause, but as a reason to sharpen. In a market defined by discipline, clarity has become the ultimate competitive advantage. And value creation continues to equal “strategic fit plus timing.” That is the ultimate reward for preparation.
MORE FROM THESE AUTHORS: How the Top 30 Medtech Companies Are Shaping the Future
Florence Joffroy-Black, CM&AA, and Dave Sheppard, CM&AA, are managing partners at MedWorld Advisors, a global M&A advisory firm serving the medical technology and life-science industries. Florence can be reached at florencejblack@medworldadvisors.com. Dave can be reached at davesheppard@medworldadvisors.com.
To view this article on the Medical Product Outsourcing Magazine website, click here.
