Selling a Medical Devices Business

A medical device company’s value usually comes down to how “shippable” and repeatable the buyer believes it is: clear regulatory status by SKU, a quality system with real evidence, reliable manufacturing output, and repeat revenue from the installed base. Multiples vary a lot by device class, sales channel, and margin profile, so start with Rejigg’s free valuation calculator. Then sanity-check the common medtech-haircut areas, like claims drift, slow complaint closures, or single-source suppliers.

No. Brokers usually charge 5–10% of the sale price for a process you can run yourself with the right tools. Rejigg gives you access to pre-vetted buyers, digital NDAs, a secure data room, direct messaging, scheduling, and offer tracking. It’s free for sellers because buyers pay. If you can answer the regulatory, quality, and manufacturing questions with documents to back it up, you can sell without a middleman.

Most timelines depend on how quickly you can satisfy a buyer’s quality, regulatory, and operations diligence. With an organized diligence pack, many deals can move in a few months. If claims support, QMS examples, change history, or supplier controls are scattered, it often stretches much longer because the buyer has to rebuild the story. Rejigg’s prepare-to-sell guide and built-in data room help you front-load the proof that usually slows medtech deals.

An LOI is a letter of intent. It’s a written offer that outlines price and key terms before full diligence and the final legal agreements. In medical devices, a strong LOI usually spells out what the buyer expects to confirm around regulatory status by product, quality system evidence, manufacturing controls, and any open investigations or field issues. Rejigg’s deal dashboard lets you compare LOIs side-by-side so you can see price, holdbacks, earnouts, and timing in one place.

Treat confidentiality as a real risk, especially with claims language, labeling, complaint examples, and regulatory correspondence. Use an NDA before sharing anything sensitive, and avoid emailing attachments that can be forwarded or lost. On Rejigg, buyers are pre-vetted and sign digital NDAs before they see sensitive information. You also control access by phase in the data room so you can share summaries first and open deeper files later.

Sometimes. SBA loans are more common for businesses with steady cash flow and low customer or product concentration, and some lenders get cautious with device companies because of regulatory and product risk. A buyer has a better shot when revenue is predictable, margins are stable, and the compliance story is clean. You can model payments and structures with Rejigg’s SBA loan calculator before you negotiate.

Most buyers ask for three years of profit and loss statements, a current year-to-date P&L, and a balance sheet that ties out. In medical devices, expect extra pressure on gross margin detail, especially rework, scrap, expediting, returns, and service costs. Those are common places where the “real” margin shows up. If you use QuickBooks, Rejigg’s QuickBooks integration can import financials and help populate your data room without hand-built spreadsheets.

Add-backs are expenses that likely won’t continue for a new owner, and they affect the earnings a buyer uses to price the deal. In medtech, common add-backs include one-time regulatory consulting for a specific submission, unusual test lab spend tied to a discrete event, and founder travel that is not needed to run the day-to-day. Document each add-back with invoices and a plain-English explanation. Rejigg’s valuation flow helps you present add-backs in a way buyers can audit.

A working capital adjustment makes sure the business transfers with enough day-to-day operating resources, like inventory, receivables, and payables. In medical devices, it can get messy because inventory includes long-lead components, sterile finished goods, and safety stock that protects service levels. Buyers usually expect a “normal” level at closing, based on history. Rejigg’s negotiation guide walks through how to prepare for that discussion.

An earnout means part of the price gets paid later if the business hits agreed targets. In medtech, earnouts often tie to milestones like a revenue target, a specific hospital win, or launching a new version on schedule without regulatory delays. Earnouts can work, but only if the definitions are tight and the buyer’s control over pricing, sales focus, and product changes is addressed up front. Rejigg’s offer comparison tools help you compare certainty versus headline price.

Many buyers want a real transition because the critical knowledge can sit in QA sign-offs, supplier relationships, complaint investigations, and service escalations. A common setup is a few months of heavier involvement, then lighter availability. What usually makes this go smoothly is specificity. Define what you will do, how often, and who becomes the long-term owner for each area. The transitioning guide helps you map that handoff.

Non-competes are designed to stop you from selling the company and immediately building a direct competitor. In medical devices, buyers often define the restriction around a product category and end market, and sometimes by geography if the sales motion is regional. Many deals also include non-solicitation of employees and key accounts. The scope should match what you actually sold and still let you work in unrelated areas. Your attorney should tailor the wording carefully.

A holdback, sometimes held in escrow, is a portion of the purchase price that stays back for a period after closing to cover specific risks. In medtech, it often relates to product liability exposure, warranty claims, inventory quality, or unresolved quality events that could turn into corrections or removals. A holdback is common. The details matter, like what triggers a claim and when unused funds get released. Rejigg’s due diligence and closing guide covers the usual patterns.

A practical medtech data room includes clean financials, customer and distributor agreements, insurance, and HR basics. Then add the device-specific layer buyers will ask for: regulatory status by SKU, labeling and UDI control, complaint and CAPA examples, supplier and contract manufacturer quality evidence, a readable design and change summary, and installed-base and service performance. Rejigg includes a built-in secure data room so you can control access by phase instead of emailing sensitive attachments.

Taxes depend on whether you sell assets or stock, how the company is set up, and how the price gets allocated across items like inventory, equipment, and intellectual property. Device deals can add wrinkles because inventory can be meaningful, and design documentation or software may carry real value. Talk with a deal tax advisor early so you know what you are agreeing to when offers come in. Rejigg’s negotiation guide explains the trade-offs you’ll see.

Buyers look closely at inventory because it can hide risk in medtech. The common issues are expired materials, obsolete revisions, reworked parts with unclear disposition, or finished goods tied to older labeling. A clean approach is to break inventory into raw materials, work-in-process, and finished goods, then flag slow-moving items with your plan. If you can tie finished goods to lot or serial traceability and show quality release status, buyers usually get more comfortable paying for it.

You’ll see mixes of cash at close, seller financing, earnouts, and holdbacks. In medtech, the structure often reflects how confident the buyer feels about regulatory posture, quality execution, and manufacturing continuity. When those areas feel fuzzy, buyers push more value into “later” buckets. When the diligence story is tight, structures tend to get cleaner. Rejigg’s deal tracking lets you compare offers on structure, not just headline price.

You find buyers by running controlled outreach and giving serious buyers enough device-specific proof to lean in. That usually means a clear claims and status summary, regulatory timeline, QMS evidence, design and change digest, installed-base behavior, and a supplier risk map. Rejigg is built for broker-free sales. It brings pre-vetted buyers, digital NDAs, direct messaging, scheduling, and a secure data room. Start with the finding buyers guide to structure outreach.

Timing is mostly about diligence readiness, not the calendar. Many medtech deals slow around major holidays and during heavy conference seasons since quality and regulatory teams get pulled in multiple directions. Buyers still move when the story is organized and document-backed. Start when you can answer claims, regulatory, quality, installed-base, and manufacturing questions without improvising. If you want to plan your timeline, book a call at schedule a consultation.