A Push to Invest in Innovation-Focused M&A

Contrary to the stock market, medtech M&A has been vibrant throughout 2026, driven by strategic and private-equity buyers’ financing needs and drive to accelerate innovation, more realistic valuation expectations by both sellers and buyers, and available public-market capital.

Buyers are prioritizing innovators that are demonstrating commercial success, short-cycle clinical adoption rates, and clear pathways to market access. Biologics, visualization, neuromodulation, imaging, and selected technology-enabled products are areas with technologies of interest, more so than commoditized hardware.

Activists (Elliott Management at Medtronic, Politan Capital at Masimo) have indicated that failing to deploy capital smartly into technology-embracing deals can make companies targets, and bad deals can cost CEOs their jobs, says Thom Busby, co-head of life sciences investment banking at Mirus Capital Advisors.

Medtronic closed at least three acquisitions and took a stake in several more companies, all offering new technologies that strengthen its existing portfolio; Wall Street greeted its latest deals, both announced September 1, with enthusiasm, although the stock has continued to trade in a modest range, which analysts believe undervalues it. The company is making a $700 million investment in Hong Kong-based Cornerstone Robotics in exchange for exclusive distribution in select ex-US markets of Cornerstone’s soft-tissue robotic platform, Sentire. It is also investing up to $80 million in Pi-Cardia, which is developing a complex TAVR device for structural heart disease.

Sentire’s closed-console, boom-based configuration is distinct from the foundation of Medtronic’s robotics portfolio, Hugo, which has an open console, modular architecture, and more closely resembles Intuitive Surgical’s breakthrough da Vinci systems. Sentire will “improve Medtronic’s ability to address different surgeon preferences, hospital needs, and markets,” wrote Wells Fargo analyst Larry Biegelsen in a note, adding that he sees Medtronic’s recent growth acceleration as “durable and supported by the depth and breadth of innovation across its businesses.” He cited management as saying that given this growth, Medtronic’s payor mix, which is two-thirds Medicare, and its highly acute procedure mix, the company has minimal exposure to cutbacks in Medicaid and ACA subsidies.

Boston Scientific is under different kinds of revenue challenges, most notably related to declining demand for one of its most important products, the Watchman device for percutaneous treatment of nonvalvular atrial fibrillation, and competitive pressures in the US electrophysiology market, which accounts for nearly 17% of its total sales. In January it completed the purchase of the pain management company Nalu, a leader in neuromodulation, for $600 million, at a 10x multiple of revenues that Wall Street viewed as encouraging. That figure wasn’t an outlier, says Cataldo, noting that “strategics are willing to pay a premium for a high-growth, highly differentiated business. We've seen the high-growth valuations improve, but strategic buyers have proven that they’re willing to pay higher multiples for those same businesses. So, it is the decision point and the trade-off that boards are always thinking--about whether to sell or go public. And right now, it's favoring M&A versus IPO.”

In total, between January 2026 and August 31, 29 M&A medtech deals closed, with orthopedic transactions focused primarily on filling product gaps, according to Ryan Zimmerman, a managing director and senior medical devices equity analyst at BTIG. That tally does not include proposed deals, such as Stryker’s agreement to buy ZuriMED, a rotator cuff repair innovator, announced August 31, or Enovis’ purchase of eCential Robotics, a French robotics manufacturer, announced September 1. In full-year 2025, in contrast, 28 deals were completed, Zimmerman continues, adding that orthopedic M&A addressed portfolio gaps in robotics, peripheral nerve therapies, and shoulder repair.

The ZuriMED deal is typical of today’s M&A market. Terms were not disclosed, but ZuriMED has demonstrated that it has an effective commercial strategy for its FiberLocker System for rotator-cuff repair reinforcement, which it launched on a limited basis in the US in early 2025, says Busby. What's most valuable to strategics right now, he adds, are the sales cycle and physician adoption metrics. Strategics will pay a premium for companies with evidence that their innovative devices are being adopted beyond the top academic medical centers by the average surgeon in a non-flagship hospital.

Likewise, PE investors are also getting more active and playing the market from both sides. On one hand, they are looking to offload portfolio companies of funds reaching the end of their lives. (See the online video interview, "First Financings, Later-Stage Volume Robust, but Where Are Exits and PMAs?"available at MyStrategist.com.)

Many mid-market spine and orthopedics companies are owned by PE firms, which are attracted by the ability to leverage manufacturers’ hard assets, while using cash flows from their businesses to cover the costs of R&D. These companies need adequate growth capital to move quickly, as being first to market with a new medical device is a strong competitive advantage in an industry where the window for differentiation closes rapidly, Busby says.

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