The medical electronic devices market comprises businesses involved in developing, manufacturing, assembling and distributing medical electronic devices used to prevent, diagnose, monitor, treat or remediate diseases. As such, we segmented the market based on medical application area into: (i) generalists, (ii) respiratory, cardio & emergency, (iii) intervention, (iv) radio, optical & imaging, (v) dental & oral, (vi) decontamination & sterilisation and (vii) measurement & diagnosis.

The European landscape is characterised by a high degree of consolidation, with the global top 10 (e.g. Medtronic, Abbott Laboratories, Boston Scientific) dominating all segments. The remainder of the market consists of SMEs focusing on market leadership in niche subsegments. Incumbents frequently take over smaller players primarily to acquire R&D capabilities and fill gaps in their product and service portfolio.

Sponsor-led interest has been limited, with ~29% of identified assets being backed by financial sponsors (March 2023). Private equity investors are primarily detracted due to strict and varying regulatory regimes across end markets as well as continuous R&D and CAPEX requirements limiting cash generation. Nevertheless, high entry barriers, international customer bases, industry organic growth and resilience as well as niche leadership dynamics serve as interesting characteristics for investors.

ESG topics relate to potential social, environmental and governance issues. The primary social topics relate to the safety of patients who are treated using medical electronic devices. Environmental factors mainly centre around the extent of sustainable practices in manufacturing and distribution processes. As such, increasing supply chain information transparency has become ever more important for incumbents. Governance issues arise from potential engagements in illegal bribes and kickbacks to healthcare clients, thereby boosting the competitiveness of a player’s product offerings.