Medtech M&A On Track For Strong Second Half Of 2021

Posted on August 9, 2021 By

In the first half of 2021, medtech M&A deals already surpassed the total number of deals from last year, and this bustle in activity is forecast to continue through the second half of the year, as medtech companies have stockpiled billions of dollars in cash. The dollar value of deals in 2021 is also expected to far outpace that of 2020. Eleven megadeals were announced in H1, with a total deal value of around $128 billion.

Medtech M&A activity kicked off 2021 right out of the gate, with at least 10 deals announced in January alone. Companies emerged from 2020 flush with cash reserves and were ready to spend on dealmaking. The medtech sector recorded a total of 33 deals in the first half of 2021. That's up from 25 total in all of 2020. In fact, the first quarter of 2021 was the busiest for medtech M&A since 2016. While the initial rapid momentum may have slowed, the second half of 2021 should be abundant with new deals.

Deals in H1 2021 Eclipsed Total 2020 Deals

Source: EY, Informa and Capital IQ 

During 2020 and the impacts of the pandemic, many companies were tentative to spend money, and most elective surgeries were halted. Once these elective procedures began to come back, the sector began to recover, and firms became more open to adding assets and buying out competition. This is a pattern that experts believe will continue, especially as long as stock prices remain up and interest rates remain low. The bigger medtech companies are seeking acquisition targets that offer high growth and significant market opportunities. Other target considerations may include gross margins, differentiated products, and any barriers to entry.

Diagnostics Lead the Way

In addition to the spike in M&A activity, transactions are happening broadly across all medtech sectors, from diagnostics to cardiology to remote patient monitoring. But diagnostics in particular have already seen a slew of deals thanks to profits banked from COVID-19 testing.

  • Medical device company Hologic announced four deals in H1 2021 totaling nearly $1.3 billion.
  • Thermo Fisher spent $450 million for Mesa Biotech, $17.4 billion for the clinical research company PPD, and roughly $880 million for Novasep's viral vector manufacturing business.
  • Quest Diagnostics and LabCorp also took part in deals in the first half.

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Now that COVID-19 testing revenues are down because of vaccine availability and reduced COVID rates, M&A should be seen as a path to make up for these losses in the diagnostics sector. However, recent surges in cases due to the Delta variant and unvaccinated populations could be a contributing factor for these companies, as testing may become back on the rise. Faster and more sophisticated point-of-care diagnostics could play a key role in managing the pandemic from here on out. This may spur further dealmaking as new technologies materialize from disruptors.

Other Medtech Areas to Watch

There has been underused wealth in the biopharma and life sciences space. In 2020, biopharma used only 12% of its firepower compared to 20% used in 2019. This underuse could lead to the possibility of increased M&A activity by biopharma companies in the future.

Companies that specialize in cosmetic surgery and other elective medical procedures, such as laser eye surgery, are expected to continue to see additional demand. As consumers have been at home saving money, pent-up consumer demand and extra cash is expected to flourish as we emerge from the pandemic. Specialty and elderly care continue to draw investor interest thanks to value driving opportunities in the realm of automation and the implementation of digital solutions.

Private equity is also expected to become more involved in the medtech space, upping the competition for deals. Thanks to a rise in home care, companies with consumer-facing solutions and technologies like remote diagnostics should remain attractive targets. There is also an expectation of sustained momentum of previous carve-outs and life science deals, as buyers vie for strong category leadership across the industry. In the more competitive segments, sector depth and operational capabilities will remain vital in capturing valuable assets.

Looking ahead to the second half of 2021 into 2022, virtual selling in the medtech space is expected to be the new normal. The pandemic stopped in-person meetings, and virtual selling became essential for medical device companies to survive. A survey by Bain & Company shows that 47% of physicians who preferred in-person visits now strongly prefer virtual engagement, and three out of five physicians believe this trend should continue.

Ready to Sell?

Reach out to our M&A experts at Benchmark International regarding how we can assist you with the sale, exit, or growth of your company. Even if you’re not sure you are ready to sell, a simple conversation with us can open up a world of opportunities for the success of your business.

Schedule A Call

: Sam Smoot at +1 (813) 898 2350 /

Europe: Michael Lawrie at +44 (0) 161 359 4400 /

Africa: Anthony McCardle at +27 21 300 2055 / 


Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $7B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 14 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.


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