Is now the year to make your move and sell or exit, especially if you’re a medical device manufacturing company with high-quality products that are addressing market issues. With numerous competitive buyers on board, it’s poised to be an epic battle for innovation supremacy! Strategize wisely and let the games begin…
Medical Device Manufacturers’ Revenue:
- Surgical & Medical Instruments(30.0%)
- Surgical & Medical Supplies(30.0%)
- Surgical & Medical Equipment(9.0%)
- Artificial Limbs & Joints (5.0%)
- Instrument & Equipment Parts(4.0%)
- Orthopedic & Prosthetic Appliances (4.0%)
- Other (18.0%)
Nonetheless, there are many other medical devices integrated with digital health technology (especially artificial intelligence and machine learning) that are also popular in California.
The total number of medical device manufacturing companies in the US is 8,900; California accounts for 44 percent of the total number of established operating medical device manufacturers in the US, estimated at 3,922 businesses, according to Dun & Bradstreet.
US & California Medical Device Manufacturing Landscape
A typical medical device manufacturer generates approximately $10 million in annual revenue and employs around 35-36 staff members.
- The overall medical device manufacturing industry comprises approximately 8,900 companies, generating $92 billion in sales and employing 320,000 employees.
- The two most significant segments of the industry are surgical and medical instruments, as well as surgical appliances and supplies, comprising approximately 2,700 companies with over $75 billion in sales and employing more than 245,000 employees. These segments are the primary focus of this profile.
- The states with the highest number of medical device companies include California (44% of the total), Florida (23%), New York (1.7%), Texas (17%), Illinois (10%), Indiana (5%), Pennsylvania (11%), Ohio (9%), and Minnesota (8%).
- Major US medical device companies include Medtronic, GE Healthcare Technologies, Johnson & Johnson, Boston Scientific, Baxter, Becton Dickinson, Beckman Coulter, Abbott Labs, and Stryker Corporation.
Source – Virtual IQ | NAICS: 339112, 339113 SIC: 3841, 3842
In California, as in the US, an increasing share of medical device manufacturers are owned by small and medium-sized companies, accounting for 60 percent.
A recent study shows ownership of medical device manufacturers as follows:
- Female entrepreneurs are 12%
- followed by 9.9% veteran-owned
- And finally, 7% of the ownership is with other groups.
Forty percent are classified under a corporate entity.
Medical Device Manufacturers are Blossoming with Growing Investments
Medical device M&A remains historically strong in 2022, staying in line with the industry’s record-breaking investments.
While totals in the healthcare industry have decreased since the highs of 2021, they are still holding steady compared to pre-2021 levels. Whether this trend continues now remains unknown; several factors, including supply chain issues, inflation, and geopolitical unrest, could influence outcomes going forward. Yet, Rogerson Business Services remains cautiously optimistic that medical devices M&A will stay relatively robust throughout the year ahead!
The market for medical device manufacturing in California is bullish, despite a recent article by Fierce Healthcare stating that Pitchbook claims deals are slowing down in the healthcare services industry.
“After a record-breaking 2021, private equity deals in healthcare achieved an impressive runner-up spot with 863 total deals announced or closed by the end of 2022.”
The article continued to enforce the slowdown in deals, stating: “Although Q4 saw fewer transactions than prior quarters, overall this was still one of the most successful years to date for PE activity within health care and demonstrates that investors remain bullish on opportunities provided through synergistic stake acquisitions in this industry sector.”
“We are seeing things slow down relative to where we were coming off of an unprecedented level of deal activity in 2021,” PitchBook’s senior healthcare analyst, Rebecca Springer, told Fierce Healthcare.
Needless to say, it is now poised to be an exciting year for medical device manufacturing companies in M&A activity, driven by two key market drivers: industry consolidation and a healthy cash reserve.
California closed four acquisitions in January and February 2023.
| Announced Date | Acquirer Name | Transaction Name | Price |
| Jan 17, 2023 | Shockwave Medical | Neovasc acquired by Shockwave Medical | $147M |
| Jan 5, 2023 | Life Science Outsourcing | J-Pac Medical was acquired by Life Science Outsourcing | — |
| Jan 9, 2023 | Ra Medical Systems | Catheter Robotics acquired by Ra Medical Systems | — |
| Feb 13, 2023 | Cytek Biosciences | Luminex – Flow Cytometry & Imaging acquired by Cytek Biosciences | — |
Source: Crunchbase
The current economic landscape presents numerous opportunities ripe for investment, while larger firms are seeking to capitalize on these gains through strategic acquisitions. It’s no wonder that experts predict mergers and Acquisitions in the MedTech and Medical Devices Sector will remain strong this year. California also created special incentive programs supporting the manufacturing industry.
When it comes to the medical device manufacturing industry, three key trends can’t be overlooked. To navigate these positive vibes successfully, let’s explore what each of these entails.
Benefits of Industry Consolidation
When efforts to innovate and develop new medical products become logistically overwhelming or financially risky, small device firms can seek out larger partners as a strategic solution.
Merging with established companies gives smaller businesses access to the expertise and resources they need, while providing their larger counterparts with entry into cutting-edge technology, enabling both parties to remain competitive in continually evolving markets.
Aging Population Driving High Demand
With the US population aging and healthcare costs increasing, medical device companies face a significant challenge.
Home health care is leading the growth in this industry as more patients receive care outside of traditional hospital settings. This shift has sparked a demand for high-tech products designed to be used by even unskilled workers or directly administered by patients themselves—think pacemakers and defibrillators.
As demographics continue to evolve, so too will opportunities in advanced medical technology; both creatively solving complex issues while containing costs at the same time.
Growth In Minimally Invasive Procedures
Surgeries enhanced by modern technology are ushering in a new era in patient care, featuring minimally invasive endoscopic procedures.
Much less traumatic than traditional open surgeries and accompanied by reduced post-operative pain, fewer complications such as infections, and quicker recovery periods – all rounds of applause for the rise of these medical advancements!
To take advantage without breaking their bank accounts, hospitals turn to fixed-fee per-use leasing systems on sophisticated optical lenses that outfit these versatile instruments.
Quite frankly, we’re living in an age where state-of-the-art healthcare access is no longer out of reach; aside from achieving better outcomes, it’s also translating into significant cost savings! See these manufacturing success stories.
Rogerson Business Services has been brokering manufacturing companies in California since 2006. We have successfully sold numerous manufacturing-related businesses across various niches and sectors. Most recently, we sold a $36 million manufacturing company deal in 2021.
Please send an email to support@rogersonbusinessservices.com to obtain the complete list of manufacturers we sell to.
Let’s delve deeper to gain a better understanding of the factors that can influence this market environment.
Let’s go…
5 Buy-Sell Medical Device Manufacturers Outlook in California
First Outlook: Interest Rates
With the medical devices manufacturing industry poised to become a hot investment prospect, now could be the ideal time for strategic buyers and acquirers alike.
Experience higher interest rates due to recent Fed action ensuring long-term high rate elevation, leading to strong returns for investors, and an attractive recession-proof option offering high security on funds invested within this sector.
Considering current market conditions, it’s evident that selling your California-based manufacturing business now is arguably the most opportune economic event, putting you firmly in the driver’s seat for lucrative financial gain.
Second Outlook: Strategic Buyers
California serves as a beacon for medical device manufacturers, attracting prospective buyers and investors seeking to capitalize on the market’s diverse range of products.
From tongue depressors and bandages to programmable pacemakers or sophisticated imaging systems, businesses seeking strategic investments have an array of options from which they can choose that perfectly cater to their goals.
This dynamic landscape offers unrestricted possibility amidst a wide selection of surgical appliances, instruments & supplies, electro-medical equipment (pacemakers, etc.), diagnostic substances (lab-related goods), irradiation apparatus (X-Ray, etc.) dental products to ophthalmic goods; so comes witness why the following medical or biomedical devices manufacturing niche is at the top everyone’s bucket list!
- Surgical & Medical Instruments
- Surgical & Medical Supplies
- Surgical & Medical Equipment
- Artificial Limbs & Joints
- Instrument & Equipment Parts
- Orthopedic & Prosthetic Appliances
Among many trending new devices in the healthcare industry that continue to evolve, there is an increased demand for single-use disposable medical instruments and devices.
Reusable products are becoming a thing of the past as more organizations recognize that this cost-effective solution allows them to avoid costly infrastructure investments, such as cleaning, repairing, and sterilizing reusable materials, while simultaneously reducing any risks associated with ineffective sterilization or potential contamination from reused equipment.
Boomer business owners are passing the torch to a new generation of savvy investors, creating an unprecedented chance for strategic buyers to capitalize on the medical device industry.
With demand remaining strong and ever-expanding despite recessions, entrepreneurs have a golden opportunity like never before!
Third Outlook: Availability of Dry Powder (Cash For Investment Availability)
As we look into the future, professionally managed medical device manufacturing companies remain highly desirable M&A targets.
This is evidenced by a massive amount of cash held in S&P 500 entities and private equity funds seeking to invest in these established businesses over the next 12 months, totaling nearly $3.7 trillion! With such impressive numbers at their disposal, mom-and-pop shop owners should rest assured that their business will certainly garner attention from potential buyers as they prepare it for sale down the line, according to Preqin.
Fourth Outlook: Capital Gains Tax
Californians are savvy when it comes to capital gains taxes, but even the great Warren Buffett needs a helping hand.
Fifth Outlook: Timing The Medical Device Manufacturer Sale
As a medical device manufacturer in California, you’ll have to decide whether you want maximum bang for your buck: wait until 2028 when the market is at its peak, or seize growth opportunities sooner by preparing now.
Get it right, and the Timing could be everything; with just some effective strategizing, this current cycle can prove incredibly lucrative! Retirement-age entrepreneurs should weigh their options carefully, as the next 5-10 years promise both potential rewards and risks.
A certified business broker specializing in the health and medical device manufacturing industry can help evaluate which goal fits best with your business’s vision before setting off into uncharted waters!
Rogerson Business Services has defied expectations and is thriving in the buy-sell market, achieving a record high last year.
This success appears to be driven by several factors that have kept growth on an impressive trajectory, ensuring that it will continue this trend of excellence.
Is Now an Even Better Year to Sell Your Medical Device Manufacturer in California if the Timing is Right? Why?
With the old guard of business owners beginning to retire, Rogerson Business Services anticipates a bustling buy-sell landscape, featuring generous cash flow multiples for those looking to exit.
Moreover, Warren Buffett agrees that now may be an opportune time for transitioning owners planning their exit from the market, as businesses performed better financially by the end of the year.
The medical device manufacturing industry in California appears well-positioned and is likely poised to provide significant rewards, both financial and personal, for all involved parties.
A special shoutout goes out to retiring business owners who can look forward to an efficient deal process that will aptly reward them after years of hard work dedicated to forging success stories!
Selling Your Medical Device Business
Selling your manufacturing business in California doesn’t have to be a hair-pulling endeavor. With assistance from Rogerson Business Services, you can trust that our expert advisors will ensure your transaction is handled quickly and safely for both parties, allowing you to benefit just as California’s manufacturing business did with its $36 million sale in 2021.
Let us help guide the way so that together we can ensure this journey runs as smoothly as possible. Contact us today and discover the opportunities that await this year.
Positioning Your Business To Capture The Best ROI
When it comes to selling your medical device manufacturing business, trust Rogerson Business Services’ expertise for successful planning and execution.
Our team has helped many manufacturing owners maximize their return on investment over the last two years alone, never settling for anything less than getting full value from a sale. As Warren Buffett put it: “Price is what you pay; Value is what you get.”
Working together with Rogerson Business Services will ensure that no detail of your holistic approach goes overlooked during this exciting journey.
As always, thank you to Rogerson Business Services for reading. We stand ready to assist you in whatever challenges you are facing. As you will see, we are very bullish on the buy-sell medical devices manufacturing trading landscape…
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In a rapidly changing market, business owners in California are seeking to unlock potential profits by making informed investments.
Joining them on the path toward success is an experienced and certified mergers & acquisitions advisor here in California who can help manufacturers of medical devices maximize their opportunities!
From determining values and creating attractive packages for buyers (all while protecting confidentiality) to forming reliable deal teams, with this trusted, certified manufacturing business broker in California paving the way, achieving peak returns has become far more straightforward than Warren Buffett himself could have imagined!
Articles and Videos Worth Checking Out
1) Medical Device Manufacturers Association (MDMA)
2) Qmed.com
Are You Ready To Sell Your Medical Device Manufacturing Company?
Rogerson Business Services is a certified business brokerage firm specializing in selling manufacturing businesses in California. Rogerson Business Services created a comprehensive summary that outlines every step of the selling process, explaining the steps involved in establishing the proper price and valuation for your medical devices manufacturing business.
Get in touch today for a free consultation and let us learn more about your manufacturing business in California.
