Medical Device Repair and Refurbishment Offers Tremendous Investment Potential

3 Min Read

Substantial Growth Propelled by Cost Cuts, Large Device Inventories, and Increasing Chronic Diagnoses  

Hospitals and healthcare systems often prefer to outsource medical device repair and refurbishment rather than keep it in-house. Outsourcing ensures lower equipment lifecycle costs, less downtime, and greater operational efficiency. It allows medical providers to maintain access to specialized expertise and advanced technology, while eliminating continuous in-house training required to stay up to date with constantly evolving equipment complexity. 

This year, the global refurbished medical device market is valued at $17 billion and is expected to grow at a 12.54% compound annual growth rate, reaching $30.78 billion by 2029.¹ Driving factors include:  

• An increasing number of new hospitals opting for alternative options to new equipment in order to decrease capital investments 
• A greater demand for cost-effective medical devices by small-scale private hospitals and clinics 
• Large inventories of used and old medical equipment​     ​ 
• An increasing need for more health care due to a worldwide rise in acute and chronic illnesses​     ​ 

North America currently holds the largest market share of the refurbished medical equipment market, with an estimated 46% of all refurbished medical imaging devices sold in the United States.² However, the Asia Pacific market is forecasted to have the highest annual growth rate in coming years.  

Investor Insights  

Sectors Driving Market Growth 

Medical imaging equipment, which visualizes the human body to diagnose, monitor, or treat conditions, is expected to hold a significant market share until at least 2029. This is due to the high cost of new medical imaging equipment, multiple refurbishment suppliers, and the growing sentiment among healthcare facilities toward purchasing refurbished medical equipment.³ 

The market demand for refurbished medical imaging equipment is particularly high in low- and middle-income countries, due to underdeveloped health infrastructure and access to healthcare resources. While there are a number of major multinational companies in this market, no major domestic players exist in these areas, leaving opportunities for a well-established domestic player to diversify and establish themselves in the market.⁴

Diagnostic Imaging: Within the medical imaging equipment sector, diagnostic imaging commanded the largest market share in 2023.⁵ Diagnostic imaging includes devices that produce internal images of the body for the purpose of diagnosing, such as MRI and ultrasound equipment. 

There is a large and aging installed base of diagnostic imaging equipment in the U.S. that requires consistent maintenance to avoid costly downtime and increase lifespan, presenting ample opportunities for companies who perform medical device repair.⁶ Companies who can provide after-sales services for refurbished equipment like maintenance and parts replacement have a greater potential to gain customer trust in this market. 

Industry Landscape and Challenges 

Risks and Restraints: Although there is significant market opportunity, there are risks to be considered. Strict government regulations on the import and sale of refurbished devices will limit the market in countries outside of the U.S. and EU.  

Additionally, an increase in new, low-cost medical imaging devices will impact the demand for refurbished equipment. Negative quality perceptions about refurbished medical devices and equipment may also hinder market growth.⁷ However, the market restraints are outweighed by the opportunities. 

Competitive Landscape: Highly fragmented with diverse players, the market is splintered by geography, service capabilities, and the vast array of medical devices used for different specialties, each requiring certain expertise. Providers range from small and regional to nationwide companies. This presents room for consolidation and collaboration amongst providers, offering great opportunity for investors.⁸ 

Key Players: To gain a competitive edge, key players are focusing on strategic partnerships and product launches.⁹ In Q2 2024, 122 merger and acquisition deals worth $21 billion were announced, including a $13 billion acquisition of Shockwave Medical, a cardiovascular medical device company, by Johnson & Johnson.¹⁰ 

• Key Players: 
  • AGITO Medical 
  • Avante Health Solutions 
  • Block Imaging International, Inc. 
  • Everx Pvt. Ltd. 
  • GE HealthCare 
  • Integrity Medical Systems Inc. 
  • Koninklijke Philips N.V. 
  • Siemens Healthcare Systems 
  • Soma Technology 

Scanning for Investment Success 

Medical device repair and refurbishment is an expanding market with tremendous potential and scalability. It recently witnessed a surge in deal activity, with significant investments and consolidation.¹¹ Private equity firms should consider this a favorable area for investment.      

We connect private equity clients with seasoned advisors who can provide deep analysis and strategic guidance. Contact us to find out more. 

Resources:

¹Refurbished Medical Devices Market Size & Share Analysis – Growth Trends & Forecasts (2024 – 2029).
²Ibid.
³Ibid.
⁴How to improve regulatory practices for refurbished medical devices.
⁵Markets and Markets: Medical Equipment Maintenance Market Size, Share & Trends.
⁶Houlihan Lokey Medical Device Repair and Refurbishment Segment Spotlight.
⁷Ibid.
⁸Ibid.
⁹Global Refurbished Medical Devices Market Overview.
¹⁰How did M&A perform in medical devices in Q2 2024?
¹¹Ibid.