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Medtech M&A set for broader resurgence in 2026 following decade-high deal value in 2025
Medtech deal value surged to $92.8 billion in 2025, the highest level in more than a decade, driven by three mega-deals. Yet overall activity lagged historical norms, with only 46 announced deals through November 30. This imbalance reflects the complex environment facing medtech deal makers. Despite strong balance sheets and fundamental performance, acquirers largely moved with caution amid regulatory shifts, macroeconomic pressure, and evolving investor expectations. However, several potentially transformative acquisitions in the second half signaled the potential for an increase in M&A activity.
In this environment, deal flow is positioned to rise as strategics realign portfolios around growth priorities, while private equity remains an active source of capital and catalyst for scale. Medtech companies that have demonstrated the ability to deliver durable, above market growth have been increasingly rewarded by investors and M&A activity is expected to intensify around assets that can extend or accelerate growth trajectories.
- Technology and data as deal catalysts. Technology will remain a key driver of transaction activity heading into 2026. Acquirers will continue to prioritize targets that accelerate digital transformation including AI-driven analytics, robotics platforms, and connected-care ecosystems. Companies that can demonstrate scalable digital infrastructure and measurable clinical or operational impact will be among the most sought after target in next year’s deal cycle.
- Portfolio optimization and capital redeployment. Corporate portfolio reshaping will intensify as companies streamline operations to concentrate capital on differentiated technologies and high-growth procedural segments including sports medicine, cardiovascular and neurostimulation. Divestitures of non-core or subscale assets are likely to continue in 2026, creating a deeper pipeline of actionable opportunities for strategics and private equity buyers. This reallocation of capital should also support renewed investment into platform technologies, adjacency expansion, and data-enabled solutions, reinforcing a healthier and more targeted deal environment.
- Private equity’s expanding influence. Sponsors are positioned to play an even larger role in 2026 deal formation. Traditional platform acquisitions will continue, but structured capital solutions, particularly build-to-buy constructs, are expected to continue as medtech companies seek flexible financing to accelerate innovation and growth. Sponsors’ ability to underwrite complex value-creation plans will keep them competitive against strategics in high-growth segments.
- Policy, regulatory, and geopolitical pressures. Policy shifts, regulatory reviews such as the U.S. Section 232 inquiry, and ongoing geopolitical and macroeconomic volatility will continue to shape deal execution in 2026. These factors are likely to lengthen diligence, complicate cross-border supply-chain assessments, and heighten scrutiny of synergies, data flows, and manufacturing integration. As a result, buyers will place greater emphasis on operational resilience, compliance rigor, and diversified sourcing when evaluating transactions.
- Capital markets reopening—but selectively. Although capital markets showed tentative signs of improvement, expectations for 2026 remain measured. Select IPOs may advance—primarily for diagnostics and minimally invasive technology companies with clear commercial traction—but investor selectivity will stay high. Many emerging innovators are likely to continue favoring M&A, structured partnerships, or strategic investment over public listings, reinforcing M&A as a central pathway to scale next year.
Key M&A trends set to influence medtech
Medtech dealmaking enters 2026 with strengthening momentum. Activity is expected to center on targeted, capability-building acquisitions although larger-scale or transformational opportunities may still emerge where strategic and financial alignment exists. Buyers are allocating capital with greater precision, prioritizing growth opportunities enabled by digital innovation, AI adoption, and differentiated technology platforms. Activity is expected to be concentrated in innovation-led categories such as diagnostics, surgical robotics, and cardiovascular, along with other areas that enable connected, data-driven care.
Private equity’s role is expected to expand, serving as both a source of capital and an operational partner. Sponsors are likely to continue pursuing carve-outs, minority investments, and platform acquisitions aligned with long-term healthcare trends, often in collaboration with strategic acquirers. These partnerships, blending financial flexibility with sector expertise, are increasingly shaping how innovation is scaled, financed, and commercialized across the medtech ecosystem.
Investor activism is reinforcing portfolio discipline, with management teams under pressure to accelerate divestitures and redirect capital toward higher-growth, innovation-led segments. While activists have been less visible through new campaigns, their influence continues to drive more frequent portfolio reviews and decisions to separate or streamline underperforming assets.
Tariff and trade policy uncertainty will remain a central factor, influencing deal timing, valuation, and cross-border integration. Shifting trade dynamics and regional economic volatility are prompting dealmakers to adopt scenario-based diligence and flexible integration strategies. Companies are placing greater emphasis on operating-model adaptability, regulatory readiness, and value-capture planning to mitigate potential disruption.
Despite near-term challenges, medtech's fundamentals remain strong, supported by consistent procedure demand and sustained investor interest in healthcare innovation. Innovations enabling more personalized care, advances in minimally invasive treatment, and expansion of digital platforms are all widening the opportunity set and reinforcing confidence in the sector’s growth trajectory. M&A will remain a priority use of capital, as companies leverage transactions to access new technologies, scale innovation, and optimize portfolios for long-term growth.
As policies, regulations, and capital markets evolve, successful dealmakers will combine strategic foresight with execution discipline—balancing near-term prudence with long-term conviction. In an increasingly complex global environment, measured, innovation-driven M&A will remain a critical lever for growth and competitive positioning.
“Momentum is accelerating into 2026 as medtech companies deploy capital with greater precision, using acquisitions and divestitures to strengthen capabilities and position themselves for sustained long-term growth.”
James Woods,Principal, US Medtech Leader, PwC USThe bottom line: What medtech dealmakers should watch in 2026
Deal activity is set to rise as medtech companies accelerate portfolio realignment and invest in technologies that expand clinical and operational impact. Strategic buyers will continue to reshape businesses through both acquisitions and divestitures, while private equity remains a strong source of capital and partnership. Amid regulatory and macroeconomic uncertainty, execution discipline and integration readiness will be essential. The most successful dealmakers will move with precision—aligning strategy and capability, forging partnerships that scale innovation, and deploying M&A as a primary engine of long-term value creation.
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