Medical Device Outsourcing M&A Update – October 2026

Acquirer Demand for Scale and Specialization Drives Medical Device Outsourced Manufacturing M&A

Medical device outsourcing has remained positioned for sustained expansion as original equipment manufacturers (OEMs) have increasingly relied on external partners for design support, precision manufacturing, assembly, testing, sterilization, regulatory services, and finished-device production. Rising device complexity, cost and capital-efficiency pressures, regulatory requirements, supplier consolidation, and OEM efforts to strengthen supply-chain resilience have driven demand for quality outsourced partners. The continued normalization of OEM inventory levels following pandemic-era overstocking has begun to support a recovery in outsourcing demand, although residual destocking pressures have remained in select end markets.

The sector’s Testing & Regulatory segment has also emerged as an active area of consolidation, providing financial sponsors with opportunities to execute buy-and-build strategies and create scaled, specialized service platforms. Combined with growing demand for differentiated outsourced capabilities, the gradual recovery in OEM production volumes is expected to reinvigorate medical device outsourcing M&A and support robust transaction activity through the remainder of 2026 and into 2027.

Mergers and acquisitions (M&A) activity in year-to-date 2026 has accelerated, with activity spanning large platform transactions, sponsor-backed carve-outs, combinations of scaled orthopedic manufacturers, and targeted capability acquisitions. KKR’s (NYSE:KKR) August 2026 announcement of its take-private acquisition of Integer Holdings (NYSE:ITGR) for an enterprise value of $5.8 billion (3.1x EV/Revenue, 15.6x EV/EBITDA) and the closing of Montagu Private Equity and Kohlberg & Company’s $1.5 billion carve-out of Teleflex’s (NYSE:TFX) Medical Device OEM division represent two of the year’s defining medical technology (MedTech) outsourcing transactions, underpinning strong private equity (PE) conviction in scaled contract development & manufacturing organization (CDMO) platforms. At the same time, transactions such as the merger between Tecomet and Orchid Orthopedic Solutions (January 2026, undisclosed) and Resonetics’ acquisition of Resolution Medical have demonstrated continued strategic demand for global scale, end-to-end product lifecycle capabilities, and exposure to high-growth therapeutic categories.

The fundamental investment thesis has remained constructive, though buyers have displayed increasing selectivity. Assets with defensible process know-how, strong quality records, durable OEM relationships, attractive margins, and credible capacity expansion plans are positioned to receive the strongest interest.

Sector Development and Growth Drivers

A broadening outsourcing mandate. Medical device outsourcing is no longer limited to build-to-print manufacturing. Leading partners have increasingly supported design validation, prototyping, process development, regulatory documentation, product transfer, commercial-scale manufacturing, packaging, sterilization, and post-market activities. The strongest CDMOs have also moved closer to customers’ product development organizations. Engineering-led relationships are typically embedded earlier in the lifecycle, produce greater switching costs, and provide opportunities to capture more content as programs move from prototype to validation and commercial production. This dynamic has favored providers with new product introduction (NPI) capabilities, design-for-manufacturability expertise, validated production processes, and available surge capacity. The sector’s primary growth drivers can be summarized by the following:

• Aging populations and greater prevalence of chronic disease have increased demand for cardiovascular, orthopedic, diabetes, neurological, and diagnostic devices.
• Device miniaturization, minimally-invasive procedures, surgical robotics, connected products, and drug-device combinations have increased demand for tighter tolerances and more specialized engineering and production processes.
• OEMs have faced sustained pressure to reduce fixed capital intensity and accelerate time-to-market, making external development and manufacturing capacity strategically valuable.
• FDA, European Union (EU) Medical Device Regulation (MDR), ISO 13485, cybersecurity, traceability, and post-market requirements have increased the value of partners with established quality systems and regulatory infrastructure.
• Supplier consolidation has favored outsourcing providers capable of assuming a larger share of the product lifecycle, simplifying vendor management and reducing handoffs.
• Nearshoring, onshoring, dual sourcing, and regionalized production have improved resilience against tariffs, geopolitical disruption, freight volatility, and single-source risk.

While large platform transactions have captured headlines, differentiated middle-market providers have remained highly attractive acquisition targets. Businesses with specialized capabilities, proven quality systems, and reliable execution are well positioned to benefit as OEMs seek to strengthen supply chains, reduce capital intensity, and address growing regulatory complexity.

Eric WilliamsManaging Director and Head of Healthcare Investment Banking, Capstone Partners

Pandemic Era Overstocking Practices Continue to Suppress Medical Device Production Levels

The COVID-19 pandemic exposed vulnerabilities within the Medical Device market’s reliance on just-in-time inventory management, prompting OEMs to build safety stock as global trade disruptions threatened production continuity. Although this initially increased demand for outsourced manufacturing, pandemic-era overstocking ultimately created excess inventories that weakened demand for new components and manufacturing services. Outsourcing activity has since moved toward normalization, but demand visibility and supply-demand cycles have not fully returned to pre-pandemic levels.

“A return to just-in-time inventory management practices is getting closer, but for now, there is still plenty of safety stock in the system to avoid future supply chain impacts,” noted David Novak, Vice President of Corporate Business Development at Cretex Medical, according to an April 2025 article from Medical Manufacturing Technologies (MMT).¹ Greater demand visibility from inventory normalization should support buyer confidence and Medical Device Outsourced Manufacturing M&A activity.

OEMs nevertheless remain cautious about returning to pre-pandemic inventory practices. Average days inventory outstanding levels among the largest medical device OEMs has remained 17% above pre-pandemic Q1 2019 levels, according to an April 2026 article from Bain & Company.²

Many manufacturers have adopted hybrid inventory strategies, preserving lean practices in which supply is dependable while maintaining targeted safety stocks for critical components exposed to geopolitical disruption, tariff uncertainty, and other global supply chain risks. Softer end market demand has further extended destocking timelines in certain medical device categories. HCA Healthcare (NYSE:HCA)—the largest for-profit hospital operator in the U.S.—reported a combined 5.7% year-over-year (YOY) decline in same-facility surgical procedures, including decreases of 2.3% for inpatient procedures and 3.4% in outpatient procedures, reducing demand for surgical demand and related manufacturing services.³ Viant Medical Holdings also reported a 3.6% YOY revenue decline in Q1 2026, although improved Orthopedic and Diagnostic order intake partially offset the decline.⁴

Buyer Appetite for Specialized Testing & Regulatory Service Providers Offsets Broader Medical Device Outsourced Manufacturing M&A Hesitancy

Medical Device Outsourcing sector M&A activity has remained expansionary despite extended demand headwinds across portions of the manufacturing value chain. M&A volume has reached 65 transactions announced or completed in year-to-date (YTD) 2026, representing a 12-deal increase YOY. Full-year 2025 saw moderate growth, rising by four deals (+6.3%) YOY to 68 total. Annual sector deal count averaged 65 deals from 2019 through 2025, remaining within a relatively narrow range of 55 to 72 transactions despite significant disruptions to healthcare supply chains, inflationary pressures, and shifting OEM demand patterns.

Acquirers have largely targeted the Contract Manufacturing segment to capitalize on multiple arbitrage, scale existing manufacturing platforms, and expand specialized production capabilities. This space accounted for 58.8% of total sector volume in full-year 2025, with YTD 2026 displaying a similar trend at 50.8% of M&A activity. In contrast to more product-specific CDMOs, contract manufacturing organizations (CMOs) largely offer wider end market flexibility; a characteristic that may remain attractive to financial buyers seeking to build out diversified platforms. General manufacturing services such as computer numerical control (CNC) machining and surface finishing can be applied across various markets, lowering customer concentration risk and exposure to therapeutic-specific volatility. Strategic and financial buyers have both demonstrated interest in medical device testing & regulatory targets, with PE leading with 10 deals (62.5% of segment volume) and strategics capturing six deals (37.5%).

Private Strategics Look to Scale Operations while PE Invests in Non-Manufacturing Assets

Sector dealmaking stability has been showcased across buyer groups, as overall M&A activity in YTD 2026 has been split nearly evenly between strategic (49.2%) and financial (50.8%) acquirers. Public companies have targeted CMO bolt-ons to integrate specialized service lines into existing operations, surpassing prior-year levels at nine deals (+28.6% YOY). TDK’s (TSE:6762) acquisition of metal 3D printer Fabric8Labs (June 2026, $400 million) and Bodycote’s (LSE:BOY) purchase of specialty heat treatment and brazing service provider Spectrum Thermal Processing (January 2026, $8 million) have reinforced this trend. Beyond Ultradent Products’ acquisition of Azena Medical (June 2026, undisclosed), the totality of dealmaking to date—and all but two transactions in full-year 2025—has been led by outsourced service providers or their sponsors rather than medical device OEMs. Instead, private market participants lower in the tiered supply chain have led consolidation across the Medical Device Outsourcing M&A space. These inorganic footprint expansions have upheld private companies’ majority share (65.6%) of strategic deal volume, which notched a two deal increase YOY to 21 transactions in YTD 2026.

Sponsor-backed M&A volume in the sector has accelerated 32% YOY to 33 deals YTD. To date, PE firms have conducted 20 add-ons (+11.1%)—and 13 platforms (+85.7%). Add-on transactions targeting CMOs have continued to fall from 2022 highs (64% of add-on activity). Full-year 2025 saw CMOs represent 39% of add-on volume while YTD 2026 has declined to 30%. Existing platforms have instead focused funds towards expanding their presence in the Testing & Regulatory segment (45% of add-ons), capitalizing from an increasingly complex regulatory environment Notably, this drop in buy-and-build strategies has been countered by platform formations nearly doubling YOY to 13 in YTD 2026. These new market entrants have targeted CMOs diversified across end markets, offering multiple revenue streams and lower risk profiles. Sector M&A growth will likely be supported by improving medical device outsourcing demand signals, particularly as newly formed platforms look to advance sector buy-and-build strategies. Several notable transactions highlighting M&A targeting specialized service providers are outlined below.

• KKR to Acquire Integer (August 2026, $5.8 billion) – KKR announced its intent to acquire Integer in August 2026 in a take-private deal with an enterprise value of $5.8 billion, equivalent to 3.1x EV/Revenue and 15.6x EV/EBITDA. The deal remains subject to regulatory approval. The purchase price reflects a 28.8% premium to Integer’s 30-day volume-weighted average price (VWAP) on the date prior to the announcement, according to a deal press release.⁵ KKR plans to invest capital into expanding Integer’s manufacturing capacity, technology integration and innovation, and talent while transforming the business into a partially employee-owned company under this next phase of long-term growth. This latest acquisition comes after the firm’s investment in fellow CDMO Precipart in November 2023 as part of its $4 billion Health Care Strategic Growth Fund II. Capstone served as financial advisor to Precipart in connection with this transaction. Integer had been an active acquirer in the Medical Device Outsourced Manufacturing M&A space in recent years, rolling up eight companies since 2019 with an emphasis on specialized manufacturing capabilities including the Capstone-advised sale of InNeuroCo to Integer (October 2023, $58 million). The deal marks the second-largest sector transaction by enterprise value since Capstone began tracking the space in 2020, falling short of the Elliott Investment Management, Patient Square Capital, and Veritas Capital-backed take-private acquisition of Syneos Health (May 2023, $7.4 billion, 1.4x EV/Revenue, 9.7x EV/EBITDA).

“Integer is an exceptional platform with highly differentiated capabilities across a global manufacturing footprint…We are excited by the opportunity to deploy capital and resources to further advance Integer’s next chapter of growth,” stated Max Lin, Partner at KKR, in the deal press release.

• Montagu Private Equity and Kohlberg & Company Acquire Teleflex Medical OEM (August 2026, $1.5 billion) – A sponsor-backed partnership between Montagu Private Equity and Kohlberg & Company acquired Teleflex Medical OEM in a carve-out valued at $1.5 billion (August 2026). The company is now doing business as (DBA) INGENYX, engaged in the development and manufacturing of custom-engineered medical device subassemblies, wiring, tubing, and other components. The transaction follows turnover in executive leadership and stagnant share price performance. Teleflex’s Medical Device OEM divestiture was accompanied by the sale of its Acute Care and Interventional Urology divisions to Intersurgical for an enterprise value of $530 million (December 2025). Teleflex plans to leverage the net cash from the deal to return capital to shareholders, pay down outstanding debt, and engage in stock buybacks.

“Medical device companies face growing pressure to innovate faster while managing complexity, risk, and cost…INGENYX is uniquely positioned to meet that need by serving as a collaborative extension of our customers’ teams, combining design for manufacturability (DFM) methodology, and our proprietary intelligence databank with a deep understanding of the decisions that shape successful products,” shared Matt Jennings, Senior Operating Partner at Kohlberg, in a deal press release.⁶

• Veristat Acquires Regulatory and Medical Writing Business of Certara (May 2026, $135 million) – WindRose Health Investors-backed CRO Veristat acquired the Regulatory and Medical Writing business unit of Certara (Nasdaq:CERT) in May 2026 for an enterprise value of $135 million, equivalent to 2.7x EV/Revenue and 7.9x EV/EBITDA. The Certara division offers regulatory advisory services and authors clinical and nonclinical documents for pharmaceutical, biotechnology, and medical device companies. Certara divested from the business to focus on the development and scaling of its artificial intelligence (AI)-powered Model-Informed Drug Development (MIDD) and Clinical Intelligence solutions. Service alignment attracted Veristat to the deal, bolstering existing presence in Biostatistics, Medical Writing, and Regulatory markets. Veristat’s global regulatory and clinical submission staff will grow by more than 200 individuals as a result of the acquisition, according to a press release.⁷ The transaction represents a resumption in Veristat’s bolt-on M&A strategy, marking the first acquisition by the company since its purchases of Instat Clinical Research (October 2023, undisclosed) and Scinopsis (June 2023, undisclosed).

“When you think about the foundation of the business and look at our recent acquisitions over probably the past six years, they all align very closely to either building and broadening our experience in biostats, data management, medical writing, or regulatory strategy,” noted Kim Boericke, CEO of Veristat, according to a May 2026 interview with BioXconomy.⁸

• Tecomet Acquires Orchid Orthopedic Solutions (January 2026, Undisclosed) – Contract manufacturer Tecomet acquired Nordic Capital-backed specialized manufacturer Orchid Orthopedic Solutions in January 2026 for an undisclosed sum. The transaction creates a medical device contract manufacturing entity boasting ~3,500 employees with manufacturing and production sites across a combined six countries, according to company resources.^9,10 The combined entities generated ~$781 million of revenues in 2025. OEM demand for enhanced supply chain resilience influenced the deal. The expanded geographic footprint also provides greater flexibility for customers, enabling an agile response to global trade developments. Orchid is Tecomet’s second transaction since swapping sponsor hands from Genstar Capital to Charlesbank Capital Partners in May 2017 for an enterprise value of $1.2 billion. The firm has been absent from M&A markets since the June 2018 acquisition of HD Surgical, with this latest transaction potentially signaling renewed interest in expanding the platform.

“This combination is about more than scale. It is about building a platform that can meet the increasing complexity and demands of our customers with greater precision, reliability, and speed,” stated Andreas Weller, CEO of Tecomet, according to a press release.¹¹

• NAMSA Acquires Early Development Medical Device Testing Business of Labcorp (January 2026, Undisclosed) – North American Science Associates (NAMSA), a CRO backed by French healthcare PE firm ARCHIMED, acquired the Early Development Medical Device Testing business unit of Labcorp (NYSE:LH) in January 2026 for an undisclosed sum. The asset’s capabilities include biocompatibility testing, microbiological testing, analytical chemistry testing, and preclinical research. These services amplify NAMSA’s existing operations in device testing, clinical research, and regulatory consulting—business areas that service more than 3,000 global clients through over 1,650 preclinical studies and 270 clinical research projects annually, according to a deal press release and NAMSA’s website.^12,13 The transaction highlights ongoing sponsor interest in consolidating fragmented Testing and Regulatory Services markets that offer recurring, asset-light revenue streams. The acquired Labcorp assets join the U.S. medical device testing operations of Wuxi AppTec (SHSE:603259), acquired by NAMSA in February 2025 (undisclosed). NAMSA joined ARCHIMED in September 2020 as part of the firm’s ~$1.2 billion MED Platform I fund, which purchased majority stakes between ~$60 – $600 million.¹⁴ Under ARCHIMED’s stewardship, the company has engaged in an aggressive inorganic growth strategy, conducting 10 add-on transactions in the Testing and Regulatory Support spaces.

The Medical Device Outsourcing sector has appeared positioned for continued expansion in transaction activity as inventory normalization progresses and reshoring investments begin translating into incremental manufacturing demand. Expanding domestic production footprints among OEMs have created favorable long-term opportunities for U.S.-based outsourcing providers, mitigating the effects of continued destocking-related pressures in certain pockets of the market. Additionally, strong buyer interest in testing, regulatory, and other specialized service platforms has continued to support sector dealmaking. Together, these dynamics should sustain healthy acquisition activity through year-end 2026 and into 2027.

To discuss the market implications of reshoring and destocking initiatives, provide an update on your business, or learn about Capstone’s wide range of advisory services and medical device outsourced manufacturing M&A knowledge, please contact us.

Brendan Bradley, Associate, was the lead Market Intelligence contributor to this article.

Endnotes

1. Medical Manufacturing Technologies, “Revisiting Relationships in Full-Service Outsourcing,” mmt-inc.com/revisiting-relationships-in-full-service-outsourcing/, accessed July 17, 2026.

2. Bain & Company, “A New Supply Chain Efficiency Playbook for Medtech,” com/insights/a-new-supply-chain-efficiency-playbook-for-medtech/, accessed July 17, 2026.

3. HCA Healthcare, “HCA Healthcare Previews Second Quarter 2026 Results,” hcahealthcare.com/news/news-details/2026/HCA-Healthcare-Previews-Second-Quarter-2026-Results/default.aspx, accessed July 17, 2026.

4. S&P Global, “Research Update: Viant Medical Holdings Inc. Outlook Revised to Negative on Persistent Operating Pressure; ‘B-‘ Ratings Affirmed,” com/ratings/en/regulatory/article/-/view/type/HTML/id/3587234, accessed July 17, 2026.

5. Integer, “Integer to Be Acquired by KKR in Transaction Valued at Approximately $5.7 Billion,” integer.net/news-events/press-releases/news-details/2026/Integer-to-Be-Acquired-by-KKR-in-Transaction-Valued-at-Approximately-5-7-Billion/default.aspx, accessed July 21, 2026.

6. Kohlberg, “Teleflex Medical OEM Launches as INGENYX to Empower Tomorrow’s MedTech Innovators,” com/teleflex-medical-oem-launches-as-ingenyx-to-empower-tomorrows-medtech-innovators/, accessed September 21, 2026.

7. Veristat, “Veristat to Acquire Certara’s Regulatory and Medical Writing Business,” com/news/certarar-rsmw-acquisition, accessed July 17, 2026.

8. BioXconomy, “Veristat Bolsters Regulatory, Medical Writing Services with $135m Certara Buy,” com/clinical-and-research/veristat-bolsters-regulatory-medical-writing-services-with-135m-certara-buy, accessed July 21, 2026.

9. Nordic Capital, “Tecomet,” com/portfolio-cases/investments/tecomet-formerly-orchid-orthopedic-solutions/, accessed July 17, 2026.

10. Tecomet, “Locations,” com/about-resources/about/locations/, accessed July 17, 2026.

11. Orchid, “Tecomet and Orchid Complete Transaction, Creating a Scaled Global Manufacturing Platform,” orchid-ortho.com/News/Article/tecomet-and-orchid-complete-transaction-creating-a-scaled-global-manufacturing-platform, accessed July 17, 2026.

12. PR Newswire, “NAMSA Announces Strategic Acquisition of Select Assets of the Early Development Medical Device Testing Business of Labcorp,” com/news-releases/namsa-announces-strategic-acquisition-of-select-assets-of-the-early-development-medical-device-testing-business-of-labcorp-302655606.html?tc=eml_cleartime, accessed July 17, 2026.

13. NAMSA, “NAMSA Has Deep Preclinical and Clinical Expertise in Numerous Therapeutic Areas,” com/expertise/devices/, accessed July 17, 2026.

14. ARCHIMED, “ARCHIMED Raises €1 Billion for its MED Platform I Fund,” group/news/archimed-raises-e1-billion-for-its-med-platform-i-fund/, accessed July 17, 2026.