Medical Device Outsourcing

Published on: 05/23/2014

Continuing a trend that we first noted last year, M&A activity in the medical device outsourcing industry appears to be accelerating. Thus far in 2014, several notable transactions have been completed or announced, and the volume of transactions is steadily rising. Capstone believes this activity is a reflection of the industry’s growth prospects, improved operating performance of both acquirers and targets, as well as a number of favorable macro factors driving M&A activity including private equity groups with ample undeployed capital ($500 billion), improved terms and availability of acquisition financing and strategic acquirers with large cash reserves seeking investments to augment organic growth. Medical device OEMs appear to be increasing their use of outsourcing as they search for ways to lower costs while improving product design and development processes, production efficiencies and time to market.

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