Understanding the Medical Equipment Services Landscape

Medical equipment services companies support the lifecycle of acquisition, preventative maintenance, repair, and disposition of permanent, technical equipment used in care delivery. Downward pressure on healthcare provider margins – which tends to reduce new capex spending and push providers to retain existing machines for longer – and growing procedure volumes are driving demand for comprehensive, timely, and cost-effective repair and maintenance services. For investors, the sector represents an acyclical, reimbursement-agnostic play on demographics-driven healthcare utilization trends, offering multiple value creation playbooks including inorganic and organic geographic expansion, equipment portfolio expansion, and verticalization.

As these attractive characteristics have driven transaction multiples in the sector higher, it is becoming imperative for sponsors to navigate potential challenges such as labor availability, growing competition for large accounts, and the complex relationship between manufacturers and third-party servicers and parts suppliers. The industry is increasingly moving toward capitated contracting and verticalization, providing customers with more predictable capex spending and allowing service providers to retain parts margin. Investors seeking exposure to medical equipment services businesses must also consider long term site-of-care shifts and the emergence of new clinical modalities and equipment types.

Download a preview of the report by filling out the form. Please contact us to request more information.