Private equity investments in healthcare equipment sector decline in H1 2023

The value of private equity deals in the healthcare equipment industry is on track for a second straight year of decline.

Total announced investment in healthcare equipment companies globally stood at $6.76 billion for the year to Aug. 22, according to S&P Global Market Intelligence data.

The number of deals also seems to be heading for a two-year annual drop. During the measured period, the data shows 309 transactions in the sector worldwide compared to full-year 2021 and 2022 totals of 755 and 582, respectively.

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In the first half of 2023, investment value dropped 19.1% compared to the same period the previous year, and the second quarter marked three consecutive quarters of decline.

However, investment for the partial third quarter was $1.64 billion as of Aug. 22, slightly surpassing the full total for the prior quarter. The rebound was in large part due to one deal: Boyu Capital Consultancy Co. Ltd.'s $600 million acquisition of Hong Kong-based Quasar Engineering Ltd., which manufactures medical devices.

Asia-Pacific takes center stage in terms of investment in healthcare equipment companies, accounting for nearly 60% of global private equity deal value. The region picked up $4.01 billion across 138 deals. North America followed with $1.81 billion of investment and Europe with $780 million.

Top transactions

For the largest private equity investment in the sector year to date, MBK Partners and UCK Partners Inc. acquired a majority stake in South Korea-based Osstem Implant Co. Ltd. in a deal valued at $1.82 billion. It is the only deal above $1 billion for the year so far.

Boyu's acquisition of Quasar marked the second-largest deal thus far in 2023, followed by The Founders Fund LLC's investment in Neuralink Corp.'s $280.3 million series D round of funding.