Medtech dealmaking remains active as companies reposition for growth

Key findings

• Medtech M&A is entering the second half of 2026 with continued momentum following a decade-high 2025, supported by strategic and sponsor-backed transactions.

• Capital market pressure and lower equity valuations are a catalyst for deals. Strategic acquirers are pursuing assets that strengthen long-term defensible growth, while private equity is deploying capital into opportunities that have become accessible at current valuations.

• Strategic acquirers continued investing in higher-growth categories including cardiovascular, neurostimulation, and ecosystem platforms spanning connected devices, patient monitoring, and workflow capabilities. 

• Portfolio reshaping, carve-outs, and take-privates remained active as companies refined strategic focus and private equity pursued operational value creation.

• Geopolitical disruption, and weaker equity performance increased selectivity and diligence, but did not materially alter long-term strategic priorities.

Medtech M&A delivered a strong first half of 2026, driven by scaled strategic and sponsor-backed transactions and underpinned by continued conviction in higher-growth categories. While disclosed deal value remained concentrated in a limited number of transactions, underlying activity remained broader than disclosed values alone suggest. As strategic acquirers have scaled, public disclosure of mid-size transactions has declined, leaving visible deal values as only part of the story. Capital continues concentrating around differentiated assets, durable growth profiles, and scaled strategic priorities as broader deal activity remains selective. For many strategic acquirers, M&A remains a critical component of the medtech growth algorithm, supporting access to innovation, category leadership, and long-term portfolio repositioning. Activity remained healthy across innovation-led acquisitions, adjacency expansion, and ongoing portfolio reshaping.

Three forms of strategic activity defined the first half of the year.

• Category innovation: Acquirers continued sourcing disruptive technology through M&A in categories such as structural heart, electrophysiology, and neurostimulation, where late-clinical and early-commercial assets remain an important pathway to durable category leadership.

• Adjacency expansion: Strategic buyers continued expanding into higher-growth categories to improve weighted-average market growth rates, with cardiovascular remaining among the most active areas of investment.

• Ecosystem investment: Connected devices, patient monitoring, and workflow platforms continued attracting investment as buyers reinforced incumbency at the site of care through software, data, and workflow capabilities.

Portfolio reshaping also remained a meaningful driver of deal activity. Companies continued evaluating where they have a differentiated right to win and are redeploying capital toward higher-growth and higher-margin categories. The resulting divestitures and carve-outs are creating a deeper pipeline of opportunities for both strategic buyers and private equity. At the same time, capital market pressure and lower equity valuations are creating openings for take-private transactions involving scaled platforms where private ownership may better support multi-year value creation. Sponsors remain well positioned to underwrite the operational transformation and portfolio repositioning that these assets require.

Geopolitical and trade dynamics remain a defining feature of the operating environment. Tariff exposure, conflict in the Middle East, and broader supply chain disruption weighed on operations and, at times, shifted management focus from M&A toward operational resilience, supply chain stability, and margin protection.

Strategic acquirers are expected to remain focused on durable growth, category leadership, and ecosystem positioning through the second half of 2026. Investment activity continues concentrating in higher-growth segments including cardiovascular, neurostimulation, and connected care platforms, where companies are seeking differentiated technologies, stronger clinical positioning, and expanded capabilities across devices, data, and patient care environments. Investment in software, analytics, and AI-enabled capabilities is increasingly centered on technologies that improve patient outcomes, enhance procedural and clinical efficiency, and support more connected care delivery.

These priorities are also accelerating portfolio repositioning across the sector. Companies continue evaluating where they have a differentiated right to win and redeploying capital away from slower-growth or non-core assets. The resulting carve-outs and divestitures are creating opportunities for both strategic buyers and private equity investors, while lower equity valuations and continued public market pressure are supporting take-private activity and broader sponsor interest in operational value creation opportunities. As valuation gaps and execution risk remain elevated, dealmakers are placing greater emphasis on disciplined capital deployment, operational resilience, and differentiated growth positioning.

As the deal environment becomes more selective, execution capabilities are becoming increasingly important differentiators among acquirers. Companies are placing greater emphasis on integration readiness, operational value creation, and scenario-based underwriting as geopolitical, reimbursement, and supply chain uncertainty continue to influence transaction assumptions. Buyers are increasingly evaluating how acquisitions strengthen long-term strategic positioning while also assessing resilience across manufacturing, commercial operations, and technology integration.

At the same time, pressure across the broader medtech innovation ecosystem is creating longer-term strategic implications for the sector. Venture capital funding for medtech startups remains constrained, and the IPO market continues to reopen inconsistently, limiting traditional exit pathways and reducing support for earlier-stage company formation and development. Strategic acquirers depend on a healthy innovation ecosystem to create the differentiated technologies and acquisition opportunities that drive future growth, increasing the importance of corporate venture investment, strategic partnerships, and continued access to external innovation pipelines.

Medtech dealmaking is expected to remain active through the second half of 2026 as strategic acquirers continue reshaping portfolios around sustainable growth, breakthrough technologies, and ecosystem capabilities. While macroeconomic, geopolitical, and capital market pressures are increasing selectivity and execution complexity, they’re also creating opportunities across carve-outs, take-privates, and innovation-led acquisitions. Companies with disciplined capital deployment strategies, operational resilience, and continued access to external innovation are likely to remain best positioned as the sector continues to evolve.

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