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Orthopedic M&A transactions have declined significantly since 2020. From 2016 through 2020, the industry averaged 34 transactions per year, peaking in 2020 with a frenzy of 42 deals. From 2021 through 2025, activity fell to an average of 21 deals per year.
Orthopedic M&A Deals by Year
However, according to Charles Hamilton, Managing Director of Healthcare at Piper Sandler, next year could bring a more robust M&A environment for medtech.
Macro Indicators are Mostly Promising
The markets managed to avoid a recession and stick a soft landing. Inflation peaked in 2022 at 9% but has since moderated to 3% in 2025, and is expected to remain stable in 2026. Unemployment rates are stable, with some weakness in blue collar jobs.
Broad equity markets are trading near all-time highs after bottoming out in early April with the announcement of the Trump administration’s reciprocal tariffs. The S&P 500 is up 17% year-to-date and 38% since April 8th.
Recovery has been slower for medtech, however. Medtech is up 5% year-to-date and 13% since April. Tariffs and earnings guidance have put pressure on medtech companies and resulted in lower valuations compared to historical averages.
Among medtech companies growing at least 15% and meeting or beating Wall Street estimates, valuation multiples have dropped from 7.2 in the pre-COVID era to 6.6 in the post-pandemic era.
“Healthcare has been under pressure almost every quarter for the last four years,” said Mr. Hamilton. “But we have started to see some improvements. We have a technology profile and AI capabilities that are coming into play, which is helping to unlock consumer growth and investment, creating a broadening of potential buyers.”
Pent Up Demand for M&A
Signaling from large cap CEOs across medtech have been bullish on M&A, underscoring the demand and existing firepower to get deals done, even for premium targets.
“We do have a strong balance sheet,” said Stryker CEO Kevin Lobo. “We can do larger deals if they are going to be value creating for the company. It’s always hard to predict the exact timing on deals. So, we do plan to be active. It is the #1 use of capital. That is our first priority is to use it for acquisitions. We remain on the hunt.”
Enterprise values remain steady and disciplined at around 3.5 to 4 times revenue at the median, opening the door for deals to get done.
Commercial stage companies continue to attract the vast majority of attention. According to Piper Sandler, just 16% of medtech M&A deals in 2025 involved early-stage companies. Since 2019, the same holds true when look at orthopedic-focused companies like Stryker (13%), Zimmer Biomet (14%) and Smith+Nephew (29%).
As the large strategics continue active portfolio management, demand for commercial, revenue accretive deals is increasing. Mr. Hamilton said he expects large-cap orthopedic companies to focus on interventional pain and sports medicine, while small and mid-cap players look to extremities and enabling technology.
Orthopedic startups must plan to build commercial traction in a high growth category backed by clinical differentiation. As revenue ramps to the $25 million range, outside of the friends and family network, exit to a strategic buyer becomes far more likely.
Orthopedic M&A transactions have declined significantly since 2020. From 2016 through 2020, the industry averaged 34 transactions per year, peaking in 2020 with a frenzy of 42 deals. From 2021 through 2025, activity fell to an average of 21 deals per year.
Orthopedic M&A Deals by Year
However, according to Charles Hamilton,...
Orthopedic M&A transactions have declined significantly since 2020. From 2016 through 2020, the industry averaged 34 transactions per year, peaking in 2020 with a frenzy of 42 deals. From 2021 through 2025, activity fell to an average of 21 deals per year.
Orthopedic M&A Deals by Year
However, according to Charles Hamilton, Managing Director of Healthcare at Piper Sandler, next year could bring a more robust M&A environment for medtech.
Macro Indicators are Mostly Promising
The markets managed to avoid a recession and stick a soft landing. Inflation peaked in 2022 at 9% but has since moderated to 3% in 2025, and is expected to remain stable in 2026. Unemployment rates are stable, with some weakness in blue collar jobs.
Broad equity markets are trading near all-time highs after bottoming out in early April with the announcement of the Trump administration’s reciprocal tariffs. The S&P 500 is up 17% year-to-date and 38% since April 8th.
Recovery has been slower for medtech, however. Medtech is up 5% year-to-date and 13% since April. Tariffs and earnings guidance have put pressure on medtech companies and resulted in lower valuations compared to historical averages.
Among medtech companies growing at least 15% and meeting or beating Wall Street estimates, valuation multiples have dropped from 7.2 in the pre-COVID era to 6.6 in the post-pandemic era.
“Healthcare has been under pressure almost every quarter for the last four years,” said Mr. Hamilton. “But we have started to see some improvements. We have a technology profile and AI capabilities that are coming into play, which is helping to unlock consumer growth and investment, creating a broadening of potential buyers.”
Pent Up Demand for M&A
Signaling from large cap CEOs across medtech have been bullish on M&A, underscoring the demand and existing firepower to get deals done, even for premium targets.
“We do have a strong balance sheet,” said Stryker CEO Kevin Lobo. “We can do larger deals if they are going to be value creating for the company. It’s always hard to predict the exact timing on deals. So, we do plan to be active. It is the #1 use of capital. That is our first priority is to use it for acquisitions. We remain on the hunt.”
Enterprise values remain steady and disciplined at around 3.5 to 4 times revenue at the median, opening the door for deals to get done.
Commercial stage companies continue to attract the vast majority of attention. According to Piper Sandler, just 16% of medtech M&A deals in 2025 involved early-stage companies. Since 2019, the same holds true when look at orthopedic-focused companies like Stryker (13%), Zimmer Biomet (14%) and Smith+Nephew (29%).
As the large strategics continue active portfolio management, demand for commercial, revenue accretive deals is increasing. Mr. Hamilton said he expects large-cap orthopedic companies to focus on interventional pain and sports medicine, while small and mid-cap players look to extremities and enabling technology.
Orthopedic startups must plan to build commercial traction in a high growth category backed by clinical differentiation. As revenue ramps to the $25 million range, outside of the friends and family network, exit to a strategic buyer becomes far more likely.
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Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
