The medtech industry is uniquely squeezed by tariffs, inflation, and an inability to raise prices, crushing margins and valuations. This financial pressure has driven stock multiples to near all-time lows, signaling a major acquisition opportunity for private equity firms.

A successful acquisition strategy goes beyond the highest bid. It involves 'thinking like the molecule'—evaluating which buyer has the specific expertise, capabilities, and cultural alignment to best steward the asset's development. This reframes M&A from a financial transaction to a decision about the asset's future.

Increasing device complexity has outpaced the capabilities of most Original Equipment Manufacturers (OEMs). Advanced manufacturing platforms are now strategic assets, not just vendors, driving a shift in M&A focus from traditional devices to the organizations that can build them.

A confluence of factors is driving M&A toward Contract Development and Manufacturing Organizations (CDMOs). Capital is loosening as interest rates fall, a decade of private equity investments are maturing, pharma-device convergence (e.g., GLP-1s) is increasing, and geopolitical pressures encourage onshoring.

To compete against entrenched pharma incumbents with massive market share, a new product cannot be merely similar. Mitzera attracted intense acquisition interest because its technology was fundamentally different, giving consumers and physicians a compelling reason to switch, which is the key concern for a potential acquirer's commercial team.

The M&A market has shifted. Buyers no longer accept simple revenue aggregation. They now conduct deep diligence to disaggregate organic from inorganic growth, demanding proof of a sustainable growth engine beyond just making acquisitions.

The current MedTech M&A market is a virtuous cycle feeding itself. Private Equity exits of mature CDMO platforms provide acquisition targets for OEMs. Simultaneously, OEM carve-outs of non-core manufacturing assets create new platform investment opportunities for PE firms.

Regulatory readiness is one of the most underappreciated value drivers in MedTech M&A. An acquirer will pay a premium for a target with a mature regulatory infrastructure, as this "organizational muscle" can save them 2-3 years versus building it from scratch.

Harvey AI's M&A strategy prioritizes acquiring talented teams over buying existing tech, even from outside its industry. The rationale is that great talent can build new products much faster with modern AI tools, making the team the more valuable asset.