Medical Technology M&A Pulse – Q1 2022

2022 Q1: A Tumultuous Start to a Critical Year

• 2022 started much as 2020 and 2021 had ended, with the world in the midst of a new COVID-19 outbreak, this one tied to the much milder Omicron variant. Fortunately, this variant’s emergence as the dominant strain of COVID improved the global health situation enough that countries worldwide began lifting restrictions and returning life to something resembling pre-pandemic normal.
• On top of COVID, the first quarter was defined by the outbreak of armed conflict between Russia and Ukraine, which has had major impacts on the global supply chain for key natural resources such as gas and wheat. Equity markets reflected this negative sentiment, with the S&P 500 and Dow Jones both down during the quarter.
• M&A transaction volume was down from the record pace of 2021’s first quarter, though still at a very healthy level, exceeding 2018 and 2020’s first quarter marks, and down slightly from 2019’’s. Valuation metrics remained advantageous for sellers, with both mean and median TEV / EBITDA multiples up from 2021-year end levels.
• The 4 tracked medical subsector indices all outperformed the benchmark S&P 500 Growth Index, which was down 9.5%, and three of the medical indices outperformed the Dow Jones Industrial Average which was down 5.2%.

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