Rarity of UK medical equipment and devices businesses

The UK medical equipment and devices sector is growing steadily but is becoming harder to access for investors. M&A deals in this segment accounted for just 11% of overall healthcare transactions in the first half of 2025, compared with a historical average of 20 to 25%. This decline is not driven by a lack of investor interest, but by a shortage of sellers coming to market.

Medical equipment and device businesses are typically high quality, scalable, and benefit from inelastic customer demand for essential products such as pacemakers, insulin pumps, knee implants, dialysis machines and surgical instruments. In contrast, non-essential devices such as cosmetic implants, aesthetic laser systems, wound dressings (branded vs. generics), premium dental materials, and fitness monitoring gadgets tend to have more elastic demand. This is because purchases can be delayed, substituted, or sourced from multiple suppliers. These products are often price-sensitive and operate in highly competitive markets, making demand more responsive to changes in price or availability. As a result, the market is consolidating around companies that demonstrate operational efficiency, recurring revenue streams and strong export capabilities. These attributes make such businesses highly attractive, and deals in this space continue to command premium valuations, often at double-digit multiples. Conversely, companies that rely on increased device usage are more exposed to fluctuations in hospital and GP productivity, particularly in areas such as diagnostics, prognosis and elective surgery volumes. For these businesses, an uptick in elective surgery and a reduction in waiting lists will be critical to driving growth.

Market context

The UK is the third-largest medical equipment and devices market in Europe, behind Germany and France, and sixth globally. The sector is expected to reach around £20 billion this year, growing at a compound annual growth rate of 7%. Post-COVID infrastructure upgrades, NHS procurement reform, and rising private healthcare investment continue to drive demand across both capital equipment and consumables.

At the top of the market outlook, two structural forces are especially important for investors in the medical devices space to note:

Policy momentum. The UK government has committed over £26 billion to reduce NHS waiting times through its Plan for Change. This includes the rollout of Community Diagnostic Centres (CDCs) and surgical hubs, which have already delivered over 7.2 million tests, checks, and scans since mid-2024. The goal is to treat 92% of patients within 18 weeks of referral, supported by reforms that allow direct GP referrals and same-day diagnostics. These initiatives are driving demand for outsourced diagnostics, surgical equipment, making healthcare suppliers significantly more attractive to acquirers.
Trade tailwinds. Recent US-UK trade agreements and regulatory alignment initiatives are reducing non-tariff barriers and improving market access for medical technologies. For UK healthcare businesses, this creates opportunities for cross-border partnerships, investment, and export growth, particularly in devices and diagnostics. Enhanced cooperation between the MHRA and FDA on regulatory reliance is accelerating approvals and drawing interest from international buyers. While these developments strengthen the UK’s position as an attractive market, valuation multiples remain primarily driven by operational performance and growth potential. However, improved access through UK-friendly trade agreements and regulatory alignment is creating a healthier environment for EU and US buyers, supporting cross-border interest and deal activity.

Sector breakdown

Medical Devices
Over one million medical devices are registered with the MHRA. Devices account for around 89% of total health technology expenditure in the UK. The high-tech segment, including AI diagnostics, robotics, and remote monitoring, is expanding at 11% annually, outpacing the broader market.

Recent deals highlight the inelastic nature of implantable and essential medical devices, which remain non-substitutable and critical for patient care. Transactions have focused on businesses producing orthopaedic implants, prosthetics, cardiovascular devices, and diagnostic technologies.

Strategic rationale: Secure manufacturing capacity, reduce regulatory exposure, and align quality systems.
Private equity view: Attractive platforms with recurring revenues, defensible contracts, and strong growth potential in digital health and connected care.

Notable 2025 deals:

Tyber Medical LLC acquired by Montagu (Jan 2025) – a manufacturer of private-label orthopaedic implants and instruments, supporting Montagu’s plan to build a global orthopaedic CDMO platform.
Medimatch Dental Laboratory Limited MBO backed by Queen’s Park Equity (Jan 2025) – a network of UK digital-led dental laboratories, supplying and produces dental devices such as crowns, bridges, dentures and implants, supplying dental practices.
Xiel Ltd acquired by MIS Healthcare (Jan 2025) – a provider of imaging, radiotherapy, and nuclear medicine equipment and servicing, broadening MIS’s diagnostic and therapy support offering.
Adapttech Ltd acquired by Amparo Prosthetics (Feb 2025) – a developer of smart prosthetic fitting and limb-socket technology, enabling faster adoption of digital prosthetics.
DCC Healthcare Limited sold to Investindustrial (Apr 2025, £1.05bn EV, c.12× operating profit) – a diversified manufacturer and distributor of medical devices, diagnostics, and pharma products.
G21 S.r.l. acquired by G Square Healthcare Private Equity (Jun 2025) – an Italian producer of injection-moulded single-use medical devices, supporting expansion of European manufacturing capacity.
Precision Surgical acquired by APC Cardiovascular (Aug 2025) – a distributor of surgical instruments and cardiovascular devices, broadening APC’s product range and clinical relationships.
Bedfont Scientific acquired by Keensight Capital (Oct 2025) – a manufacturer of non-invasive breath-analysis medical devices, supporting their next phase of global growth.

Most of the 2025 transactions involve companies producing highly inelastic products including orthopaedic implants (Tyber), dental prosthetics (Medimatch), imaging and radiotherapy systems (Xiel), prosthetic-fitting technology (Adapttech), essential diagnostics and medical consumables (DCC Healthcare, G21), cardiovascular devices (Precision Surgical), and clinical breath-analysis equipment (Bedfont), all of which are non-discretionary, clinician-specified, and lack viable substitutes. By contrast, the more elastic segments sit at the distributor and service layer, where buyers have marginally greater choice, seen in the distribution-heavy models of Precision Surgical and parts of DCC, though even here elasticity is constrained by clinical preference, embedded workflows, and regulatory requirements.

Consumables
High-volume consumables such as wound care products, PPE, and catheter kits see consistent demand supported by long-term contracts and supplier relationships.

Strategic rationale: Recurring revenues, contract stability, and private-label opportunities.
Private equity view: Attractive for platform creation and bolt-on acquisitions.

Notable 2025 deals:

GS Medical Limited acquired by GBUK Group (Jan 2025) – a supplier of critical-care consumables to the NHS, strengthening GBUK’s hospital supply capabilities.
Cryo Store Limited acquired by hVIVO plc (Feb 2025, up to £3.2m, ~3.6× revenue / 6.2× EBITDA) – a specialist in cold-chain packaging, storage, and logistics for clinical trials, adding critical temperature-controlled capabilities to hVIVO.
IMS Euro Limited acquired by Elysian Capital (Apr 2025) – a distributor of sterile and single-use medical consumables, completed via a management-backed buyout.
Elident Group S.p.A. acquired by DD Group (Apr 2025) – an Italian distributor of dental and medical equipment and consumables, strengthening DD Group’s cross-border footprint.
Renew Inserts product line acquired by Clinisupplies (KKR) (Aug 2025) – a US continence-care product line focused on bowel management inserts, expanding Clinisupplies’ continence consumables portfolio.
Concepta Diagnostics acquired by Boots from MyHealthChecked (Oct 2025, £2.3m EV, loss-making) – a provider of at-home diagnostic and wellness testing kits, supporting Boots’ strategy to scale home testing within its broader healthcare services offering.

Durable Medical Equipment (DME)
The UK’s DME sector, including surgical instruments, hospital beds, mobility devices, laboratory equipment, and imaging systems—is dominated by engineering-led manufacturers with proprietary processes and embedded servicing operations.

Strategic rationale: Portfolio expansion, acquisition of technical IP, and margin protection.
Private equity view: Strong buy-and-build potential, often paired with distribution or servicing capabilities.

Notable 2025 deals:

DIESSE Diagnostica Senese S.p.A. acquired by Fremman Capital (Jan 2025, £110m EV, ~3.6× revenue) – an Italian manufacturer of point-of-care and immunodiagnostic analysers, enabling Fremman to expand in rapid diagnostics.
Hospital Services Limited acquired by Asker Healthcare Group (Feb 2025) – a distributor and servicer of medical supplies across diagnostics, clinical, and surgical settings, giving Asker a UK operational base with service infrastructure.
Industrial Production Processes (IPP) acquired by Indutrade AB (Apr 2025, £15m sales) – a UK supplier and distributor of medical equipment, strengthening Indutrade’s clean manufacturing supply capabilities.
Safe Life AB acquired by Bridgepoint (Jun 2025, £432m EV, ~2× revenue) – a Nordic provider of patient-safety products, including fall-prevention and mobility aids, broadening Bridgepoint’s health and safety product portfolio.
Birmingham Optical Group acquired by Advancing Eyecare (Aug 2025) – a UK distributor of ophthalmic diagnostic and imaging equipment, giving Advancing Eyecare greater UK distribution scale and access to innovation.

Asset scarcity is driving competition
The UK medical equipment and devices landscape remains fragmented and often localised, with few companies achieving true national scale or international reach. Consolidation is accelerating as both trade buyers and private equity compete for a limited pool of high-quality assets.

Key market dynamics

Firms with strong servicing infrastructure, proprietary products, or multi-channel distribution attract the greatest buyer interest.
Evidence of British manufacturing or contract manufacturing capacity is increasingly valued for supply chain resilience and NHS procurement preferences.
Trade acquirers are focused on vertical integration, while private equity platforms target bolt-ons with recurring revenues or export leverage.
Despite strong demand, the number of quality assets is low. Barriers such as regulatory complexity, entrenched customer relationships, and embedded servicing operations make these businesses difficult to replicate.
Buyers must acquire to scale, and sellers retain the advantage. Asset scarcity is helping drive multiples higher.

Drivers of scarcity

Regulatory burden: Compliance with MHRA standards and post-Brexit UKCA marking adds complexity and cost.
High barriers to entry: Quality systems and clinical validation requirements deter new entrants.
Preference for scale and recurring revenue models: Larger platforms with defensible contracts are favoured.
Impact of MDR/IVDR compliance costs: Many smaller firms are exiting or being absorbed. (MDR refers to the EU Medical Device Regulation, and IVDR to the In Vitro Diagnostic Regulation, both imposing stringent compliance obligations.)

Differences between segments
Medical consumables, including single-use instruments, procedure packs and infection control products, continue to consolidate. The market remains highly fragmented and NHS procurement reforms and sustainability requirements increasingly favour scale suppliers. This is making it more difficult for smaller firms to compete as larger groups benefit from purchasing power, broader ranges and greater compliance capacity.

The UK medical device market is less fragmented, with larger players already established across orthopaedics, cardiovascular and diagnostics. Consolidation has been driven by regulatory complexity, cost pressures and NHS procurement reforms, and buyers are prioritising businesses with strong servicing infrastructure, proprietary products or multi-channel distribution. British manufacturing or contract manufacturing capability is becoming more valuable because of supply chain resilience and NHS preferences. Trade buyers are focused on vertical integration and private equity is targeting bolt-ons with recurring revenues or export potential. Despite strong demand, high barriers to entry mean that few high-quality assets come to market, giving sellers a meaningful advantage.

Operational momentum
UK-based manufacturers and distributors recorded a 42% increase in sales in Q1 2025 compared with the previous quarter. Year-on-year growth also exceeded 40%. Exports are improving, throughput is rising, and capacity investment is showing results.

The extension of CE mark recognition through 2030 has preserved access to global markets. At the same time, MHRA regulatory reform has lowered friction for UK operators. NHS procurement now favours value-based and digitally integrated suppliers, benefiting smaller, tech-enabled businesses able to deliver on those requirements.

M&A as a route to scale

M&A Drivers
M&A is increasingly used to build scale rather than simply to secure exits. Strategic acquirers are adding new capabilities, expanding product lines, and securing long-term NHS contracts. Private equity sponsors are driving buy-and-builds across diagnostics, consumables, packaging, and servicing.

Typical drivers include:

Servicing infrastructure or long-term contracts
European or Middle Eastern commercial reach
Integration of digital tools and automation
Proven products in regulated categories

The buy-side remains diverse, including manufacturers, distributors, logistics groups, and global healthcare investors.

Why these businesses trade well

Scarcity – Few UK firms combine scale, profitability, and sector specialisation. Buyers must acquire to grow.
Demand durability – Healthcare demand is non-cyclical. Devices, DME, and consumables are essential across NHS and private settings.
Export leverage – Many UK firms already export. CE marking alignment and global regulatory recognition continue to open new markets.
Engineering-led operations – Strong margins, low overheads, and defensible technical capability make these businesses efficient and resilient.
Technology enablement – Servicing, packaging, diagnostics, and sterilisation are increasingly enhanced by automation, digital traceability, and IoT integration. The Internet of Things (IoT) refers to physical devices connected to the internet that collect and share data, enabling predictive maintenance, real-time monitoring, and smarter supply chains.

Summary
The UK medical equipment and devices market offers strong growth, reliable earnings, limited competition, and export potential.

For owners, the opportunity is not only about timing a sale but about selecting the right partner to scale a highly sought-after asset class within UK healthcare. Buyers are actively pursuing acquisitions to capture policy and trade-driven tailwinds. Quality assets command premium valuations. The real opportunity lies in owning the right kind of rarity.