2024 and beyond: Larry Barr deciphers MedTech M&A markets in BONEZONE®

On May 21, ORTHOWORLD’s BONEZONE published an interview with Middle Branch Partners’ Larry Barr: What to Make of the Current M&A Landscape (Dan Cook). In it, Larry discusses this year’s increased M&A activity, the new normal of non-zero interest rates, and the resulting reduction in valuations and multiples of high- and middle-market MedTech transactions:

“For the past decade we’ve had almost zero interest rates, which many people have grown accustomed to as the norm,” [Barr] said. “Now, we’re in a normalized environment. People are still adjusting to this new reality and its impact on their businesses, profitability and valuations.”

Orthopedic valuations and multiples compare favorably to overall medtech, according to ORTHOWORLD, which noted that commercialized targets generate the most interest.

Barr said larger deals saw 18 to 20 times the earnings multiple and middle market transactions used to be around 13 to 15 times the multiple. Overall valuations have pulled back from those levels, but that hasn’t lowered expectations among sellers.

“Company reps might hear about a competing business that sold for 14 times earnings two years ago and wonder why they can’t get the same deal,” Barr said. “It’s important to understand that the market is changing, and every business is different.”