PwC's Next in Health · 2026-06-25 · 12 min
Key moments - from our scoring
Substance score
28 / 100
Five dimensions, 20 points each
Despite operating in a complex environment marked by tariffs, supply chain challenges, geopolitical uncertainty, and challenging capital markets, the medtech sector has maintained robust deal momentum - closing $37 billion across 29 transactions through May 2026, on pace to match 2025's record $100 billion year. James Woods, PwC's U.S. MedTech leader, explains that this confidence stems from three primary deal motivations: tuck-in acquisitions deepening category expertise, expansion into adjacent markets and business models (particularly cardiovascular, robotics, and electrophysiology), and strategic investments in connected care and ecosystem enablement. Companies are using depressed valuations as an opportunity to acquire previously unattainable assets while simultaneously pruning portfolios to focus on durable organic growth - the primary driver of valuation in medtech. Private equity has capitalized on this volatility through take-privates and carve-outs, creating operational value outside public market scrutiny. The broader thesis centers on medtech's unique position to address healthcare system challenges - aging populations, cost pressures, practitioner shortages - by leveraging their proximity to patient data and ability to connect disparate care systems. Success requires disciplined portfolio management balancing organic and inorganic investment, strategic divestiture of underperforming assets, and reinvestment into high-growth businesses with defensible moats.
Companies are investing through uncertainty because organic growth remains the primary driver of valuation in medtech, and depressed valuations are creating rare opportunities to acquire previously unattainable high-growth assets. Additionally, companies must actively reshape portfolios and invest in innovation to maintain competitive positioning as the healthcare ecosystem transforms around cost pressures and provider capacity challenges.
Investment is concentrating in cardiovascular (structural heart, intravascular lithotripsy, electrophysiology), robotics, and connected care platforms. Companies are also making tuck-in acquisitions to deepen category expertise and expanding into adjacent markets to drive durable growth rates.
Private equity is active through take-privates of publicly traded medtech companies and acquisitions of carve-outs from diversified portfolios. PE investors are capitalizing on depressed valuations and using private ownership to drive operational value creation and reposition business models away from public market pressures.
Connected care enables medtech companies to position themselves at the center of the care continuum by connecting disparate systems across settings of care. This creates new profit pools by improving efficiency and patient outcomes while allowing medtech to leverage unique data collection capabilities and patient proximity to address broader healthcare system challenges like cost and practitioner shortages.
Successful companies align their growth algorithm through disciplined portfolio management: proactively divesting underperforming businesses, aggressively investing in high-growth assets, building moats around core businesses, and pursuing M&A to acquire strategic capabilities. This balance is critical because organic growth is the primary valuation driver, making portfolio composition essential to shareholder returns.
Our reviewer’s read on each dimension, with quotes from the episode.
A handful of useful data points on deal volumes and a reasonable taxonomy of deal types (tuck-ins, adjacencies, ecosystem plays) anchor the episode, but the analytical depth is thin for the runtime. Most claims are broad sector commentary rather than genuinely novel observations a practitioner couldn't have constructed themselves.
we finished 2025 with some of the highest deal activity that we've seen in a decade. We had almost $100 billion worth of deal value, over 55 deals
We've had $37 billion worth of deals through May, over 29 transactions
The episode recycles widely circulated consulting-sector frameworks - portfolio optimisation, organic growth as valuation driver, PE opportunism on depressed valuations - without offering any contrarian or first-principles argument. There is no fresh thesis, just competent summary of consensus views.
organic growth really is the driver of valuation and shareholder return in the medtech industry
The depressed valuations that we're seeing now are creating opportunities for investments into assets that previously may have been unattainable
Both participants are PwC advisory partners, not medtech operators who have actually built, run, or sold companies at scale. This is a two-consultant internal dialogue produced as a marketing vehicle for a PwC report, which significantly limits the practitioner credibility of the insights shared.
Joining me today is James Woods, PwC's U.S. MedTech leader
I'm Glenn Hunzinger, PWC's U.S. Health Industries Leader
The episode earns modest credit for concrete aggregate deal figures and named clinical subsectors (intravascular lithotripsy, electrophysiology, structural heart), but no specific companies, individual transactions, valuations multiples, or deal names are cited, leaving the evidence base frustratingly abstract.
We had almost $100 billion worth of deal value, over 55 deals
within intravascular lithotripsy, within electrophysiology, all of which are enabling those growth trajectories
The host and guest are PwC colleagues and the exchange is visibly scripted - the host consistently validates rather than probes, the guest agrees with the host's framing, and there is zero pushback or productive tension throughout the episode. Questions are vague and leading rather than sharp.
I agree with your point there
Yeah, and I think you raised some good points
Computed from the transcript - who did the talking, and the words that came up most.
Glenn Hunzinger, PwC's US Health Industries Leader, speaks with James Woods, PwC's US MedTech Leader, about the forces shaping MedTech dealmaking in 2026. Despite capital market pressures, supply chain challenges, and geopolitical uncertainty, companies continue to invest in innovation, portfolio transformation, and growth opportunities. The conversation explores where capital is flowing, how companies are reshaping portfolios, and what dealmakers should watch in the months ahead.
Transcribed and scored by The B2B Podcast Index.
1 - > SPEAKER_01: Welcome to PWC's Next in Health. 2 - > I'm Glenn Hunzinger, PWC's U.S. 3 - > Health Industries Leader.
4 - > Today we're talking about med tech deal making and how 5 - > companies are positioning themselves for growth in a 6 - > pretty complicated environment. 7 - > On one hand, leaders are dealing with tariffs, supply chain 8 - > challenges, geopolitical uncertainty, and continued 9 - > pressure from the capital's markets. 10 - > On the other hand, deal activity remains active and companies 11 - > continue to make significant investments in innovation, new 12 - > technologies, and higher growth markets and adjacencies.
13 - > So what's driving that confidence? 14 - > What are companies doing to place their bets? 15 - > How are they thinking about things more broadly, both from a 16 - > strategic buyer perspective and private equity, and what leads 17 - > to the next phase of growth for this sector? 18 - > Joining me today is James Woods, PwC's U.
S. 19 - > MedTech leader. 20 - > James, welcome back. 21 - > SPEAKER_02: Glenn, great to be here.
22 - > Thanks for having me. 23 - > SPEAKER_01: So, James, interesting first half of the 24 - > year. 25 - > Maybe just give us the background. 26 - > What are you seeing?
27 - > What's driving some of the med tech deal activity in this first 28 - > half? 29 - > SPEAKER_02: Well, I think Glenn, as you said, it's a pretty 30 - > complicated environment. 31 - > So maybe taking a quick step back, we finished 2025 with some 32 - > of the highest deal activity that we've seen in a decade. 33 - > We had almost$100 billion worth of deal value, over 55 deals, 34 - > led by a number of very significant mega deals in the 35 - > industry.
36 - > And as we look at where we are at about the mid-year for 2026, 37 - > we are seeing that level of activity continue. 38 - > We've had$37 billion worth of deals through May, over 29 39 - > transactions, putting us on a pretty similar pace for last 40 - > year. 41 - > I would say all of that activity is happening against the 42 - > complicated backdrop that you described. 43 - > Obviously, there are the geopolitical and macroeconomic 44 - > considerations.
45 - > Supply chain challenges are very complicated. 46 - > And particularly for the med tech sector, the capital markets 47 - > have been extraordinarily difficult over the last six 48 - > months or so. 49 - > That's driven by a few factors. 50 - > Some of it is the AI trade and interest in other high-growth 51 - > markets that have led to capital rotation out of med tech.
52 - > Some of it is concerns around the growth profile and the 53 - > sustainability of growth rates that we've seen over recent 54 - > years. 55 - > So against that backdrop, I would say we have seen and are 56 - > encouraged by the level of activity in the market. 57 - > That's really centering around a few different types of deals and 58 - > motivations for deals. 59 - > We're seeing a continued steady diet of tuck-in acquisitions, 60 - > companies looking to increase their depth in particular 61 - > categories and add innovative assets to their bag.
62 - > We're seeing increased focus around adjacencies and companies 63 - > looking to expand their portfolios into new businesses 64 - > to drive durable growth rates. 65 - > And we are seeing increased plays amongst companies into new 66 - > types of business models around ecosystem enablement and 67 - > connected care. 68 - > All of those trends we think are likely to persist as we look out 69 - > through the rest of 2026. 70 - > SPEAKER_01: Yeah, and I think you raise your good point around 71 - > just where the med tech capital markets is and sort of how it's 72 - > trading as a discount to the overall market.
73 - > Obviously, some of those factors is top-line growth. 74 - > And yeah, that's obviously a big thing for the industry is the 75 - > portfolio, the portfolio optimization, the pruning, and 76 - > the reinvesting around areas of growth for the med tech market. 77 - > So, you know, with that as backdrop, James, I know you 78 - > spend a lot of time from the value creation lens and helping 79 - > people look at that deployment of capital to create value. 80 - > Could you talk a little bit about where are people 81 - > investing, what types of assets, and what adjacencies?
82 - > Sure. 83 - > SPEAKER_02: I agree with your point there. 84 - > Certainly the focus on portfolio management has never been 85 - > higher. 86 - > Companies are taking hard looks at their portfolios and looking 87 - > for those avenues of durable growth and looking to divest 88 - > those businesses that may no longer be fit with their 89 - > portfolio or maybe a drag on their top line growth.
90 - > We've seen persistently that organic growth really is the 91 - > driver of valuation and shareholder return in the 92 - > medtech industry, and companies are orienting their portfolios 93 - > around that. 94 - > I would say that trend is also being enabled by the capital 95 - > market position that we're currently in. 96 - > The depressed valuations that we're seeing now are creating 97 - > opportunities for investments into assets that previously may 98 - > have been unattainable and are drawing interest from private 99 - > equity and financial sponsors back into the medtech market 100 - > where they may see opportunity to create value operationally.
101 - > In terms of where companies are investing their capital and some 102 - > of those growth opportunities, we see continued investment into 103 - > cardiovascular as a sector. 104 - > There's a tremendous amount of innovation that exists within 105 - > the structural heart, within intravascular lithotripsy, 106 - > within electrophysiology, all of which are enabling those growth 107 - > trajectories that are drawing investor interest. 108 - > We've seen increasing advancements in the technology 109 - > around robotics, also enabling that ecosystem business model 110 - > reinvention that I mentioned before.
111 - > And we are seeing continued interest in connected care and 112 - > the opportunity for med tech companies to position themselves 113 - > at the middle of the care continuum and create linkages 114 - > between disparate systems, enabling greater efficiency and 115 - > improved patient outcomes across settings of care. 116 - > SPEAKER_01: Yeah, and I think you raised some good points, 117 - > which is the investments of previous years versus the future 118 - > years, this idea of connected care and kind of moving beyond 119 - > the device.
120 - > And obviously, you need capital to do that. 121 - > So maybe, James, as you think about that, why are they doing 122 - > that? 123 - > What are they looking to accomplish? 124 - > How are they looking to create value?
125 - > SPEAKER_02: Well, I think that opportunity really sits at the 126 - > center of the broader transformation that we're seeing 127 - > in a healthcare ecosystem. 128 - > As we've talked about in the past, there are some real 129 - > challenges facing the healthcare ecosystem, whether it's the 130 - > aging population, whether it's the cost of care, whether it's 131 - > shortage of practitioners, all of those are creating 132 - > opportunity for the medical device industry to help solve 133 - > those broader challenges.
134 - > MedTech is uniquely positioned to capitalize on that 135 - > opportunity based on the data that they collect or could 136 - > collect by thinking differently about their position and their 137 - > proximity relative to patients and across the site of care, as 138 - > well as their ability to connect disparate systems within the 139 - > site of care. 140 - > All of those trends are creating opportunities for medtech 141 - > companies to unlock new and different profit pools that 142 - > really can deliver a sustainable benefit both to patients and to 143 - > the healthcare ecosystem.
144 - > SPEAKER_01: Yeah, I think you captured it well in the future 145 - > of MedTech on this idea that medtech can really drive the 146 - > overall change in the market when we think about the$5 147 - > trillion to spend in the US and how much of that is really 148 - > within the health services and the provider and how medtech can 149 - > really enable those efficiencies to drive cost out of the 150 - > equation. 151 - > So certainly connected care in that aspect is so important.
152 - > And it's great to see the investments continuing to pour 153 - > into this. 154 - > This way, you don't need intervention from nurses. 155 - > Things can happen in sort of a simultaneous, autonomous way. 156 - > So that's great to see.
157 - > Just the along the lens of portfolio re-evaluation and 158 - > redeploying capital and being able to invest in these 159 - > connected care future and technology assets. 160 - > Can you just talk a little about like where do you see that 161 - > portfolio reshaping and how has private equity played today? 162 - > They've been quite active and we're continuing to hear private 163 - > equity being hacked around med tech. 164 - > But just talk a little bit about that, Jay.
165 - > SPEAKER_02: Yeah, sure. 166 - > I mean, private equity has long been an active investor in the 167 - > med tech industry. 168 - > And I think that's a trend that we expect to see again, in part 169 - > opportunistic relative to current valuations and some of 170 - > the capital market pressures that we're seeing. 171 - > We've seen private equity active both in take privates of 172 - > strategic players in the industry as well as acquiring 173 - > carve-outs of broader diversified portfolios.
174 - > And in each of those cases, I think private equity is well 175 - > positioned to drive operational value creation and to help 176 - > position those businesses for growth outside the eye of the 177 - > public investor. 178 - > And I think there's real opportunity in that process to 179 - > also reposition business models around different means of 180 - > competition in the future. 181 - > Those transitions can be very challenging to navigate as a 182 - > publicly traded company, but under the ownership of private 183 - > equity, it does create that opportunity to reshape and 184 - > reposition the business.
185 - > SPEAKER_01: Yeah, and certainly we've seen take private. 186 - > You know, what's your view on that? 187 - > You think that's a trend that's here to stay? 188 - > SPEAKER_02: Certainly, Glenn, I think that there will be a 189 - > continued opportunity for private equity to take private, 190 - > publicly traded bed tech companies.
191 - > As we look at valuations across the industry, there is a clear 192 - > delineation between those that are trading still at a relative 193 - > premium to the rest of the industry and those that are not. 194 - > So I think there is opportunity to drive that type of 195 - > operational value creation, improve the performance of those 196 - > businesses. 197 - > And then whether it be through portfolio shaping under private 198 - > ownership or returning those assets to the capital market 199 - > over time, I think that is a trend that we expect to see.
200 - > SPEAKER_01: Yeah. 201 - > And it's certainly interesting to see where, you know, call it 202 - > smart money or otherwise is looking to invest, which may 203 - > indicate certain arbitrage in the market. 204 - > So, James, you obviously spent a lot of time with exec teams just 205 - > from a strategic value lens, how to deploy capital that's 206 - > obviously gonna create value. 207 - > Can you just talk about what you think is ahead for the remainder 208 - > of 2026 and how you're having those discussions with deal 209 - > makers to kind of shape that?
210 - > And how do they stay competitive in a market like this, you know? 211 - > SPEAKER_02: Yeah, I think it really comes down to some of 212 - > those key themes that we talked about, right? 213 - > We expect that organic growth will continue to be the primary 214 - > driver of valuation and shareholder return in the 215 - > medtech industry. 216 - > And the companies that are able to align their algorithm around 217 - > that growth through a balance of organic and inorganic investment 218 - > into the business and careful management of their portfolios 219 - > will be best positioned to drive that type of performance.
220 - > MA will continue to be a critical part of that algorithm, 221 - > whether it's on the buy side or the sell side. 222 - > And we think that companies are very disciplined around 223 - > proactively evaluating their portfolios, identifying 224 - > opportunities to improve performance, identifying 225 - > opportunities to invest more aggressively into growth assets, 226 - > opportunities to invest in moats to protect those growth 227 - > businesses for a more durable weighted average market growth 228 - > rate, and opportunities to find a better owner for businesses 229 - > that may no longer be fit for purpose within their portfolio 230 - > where another owner may be able to unlock additional value.
231 - > That type of discipline around the portfolio management is 232 - > going to be critical to driving shareholder return in the future 233 - > for MedTech. 234 - > SPEAKER_01: Well, listen, James, I think you set the scene well, 235 - > which is from a broader shareholder value lens, 236 - > certainly some challenges in the subsector. 237 - > But obviously, this idea of portfolio and investing and 238 - > divesting to continue to create value is here. 239 - > And the speed of change obviously moving exceptionally 240 - > fast, because it needs to be just given where the underlying 241 - > sort of landscape is.
242 - > So you really gave our listeners a lot to think about, a lot to 243 - > what we're seeing in the market, a lot of what you're doing to 244 - > advise our clients. 245 - > So thank you for joining us today, James, and for constantly 246 - > continuing to move this sector forward. 247 - > SPEAKER_02: Glenn, great to speak as always. 248 - > Look forward to the next one.
249 - > SPEAKER_01: To learn more, check out our MedTech Deals mid-year 250 - > 2026 Outlook Report, now available and linked in the show 251 - > notes. 252 - > And thank you all for tuning in to PWC's Next in Health. 253 - > For more on these topics and other insights across health 254 - > industries, please subscribe to our podcast at pwc.com forward 255 - > slash US forward slash next in health podcast.
256 - > Until next time, this has been Next in Health. 257 - > SPEAKER_00: This podcast is brought to you by PWC All Rights 258 - > Reserved. 259 - > PWC refers to the U.S.
260 - > member firm or one of its subsidiaries or affiliates, and 261 - > may sometimes refer to the PWC network. 262 - > Each member firm is a separate legal entity. 263 - > Please see www.pwc.
com slash structure for further details. 264 - > This podcast is for general information purposes only and 265 - > should not be used as a substitute for consultation with 266 - > professional advisors.
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