Medical Technology M&A Pulse – Q1 2023

Q1 2023: A Resilient Macro Economy

• Q1 2023 performance was volatile, even in comparison to a challenging 2022. Companies continue to try and make sense of conflicting macro environment signals; particularly a strong U.S. consumer, paired against an ambitious and somewhat unpredictable Federal Reserve. Consumer spending across sectors remains strong, with Healthcare expenditures rising 6.8% over the past year. Broadly, public markets were flat for the quarter, with the Dow down just under 1%, while the S&P 500 Growth Index experienced a solid rebound, rising approximately 10%.
• Medical M&A activity in the first quarter largely kept pace with 2022 levels, seeing 138 announced transactions vs. 131 in the same period last year. The Consumables and Disposables sector had a very strong first quarter, making up 23% of all transactions, much higher than its typical 10-15% transaction share.
• Most medical device sectors tracked by PMCF struggled in the first three months of the year, with the exception of Orthopedic index. The Orthopedic index was the sole positive performer during the first quarter, keeping pace with the S&P 500 Growth Index, both up approximately 10%. PMCF’s Diversified Medical Device index trailed the pack, ending Q1 down 5%. Going forward, companies will continue to monitor interest rates, rising inflation, and the effects they have on the U.S. consumer and broader macroeconomic picture.

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