A sector growing at 5% and collecting at 96 days
Medical technology is one of the few European sectors to have grown by more than 5% a year for an entire decade without depending on the cycle. The European market is worth €170 billion and is the second largest in the world after the US; Spain is among the five largest on the continent, with €17.7 billion in revenue, 933 companies and a third of its sales abroad.
And yet one in five companies in the Spanish sector closed 2025 with a loss. The explanation lies with the customer. Public hospitals buy through tenders, at prices set before twenty points of cumulative inflation that the contract does not allow to be passed on, and pay when they can: the regional governments had built up more than €1.1 billion in outstanding invoices with the sector and were settling at 96 days on average. For an SME distributor with two or three product lines, that working capital is the difference between growing and surviving.
So it is fair to ask why a financial investor, who lives off cash generation and leverage, would want to enter a business whose main customer is a public administration that pays late and does not renegotiate prices.
Manufacturers do not sell direct in southern Europe
The answer lies not in the product but in how it reaches the hospital. Large manufacturers sell through their own sales force where volume justifies it: the United States, Germany, France, the United Kingdom. In peripheral markets, and southern Europe is one, they delegate to distributors. The reason is operational: seventeen regional health services buying through tenders, and hospitals that demand presence in the operating theatre, surgeon training, equipment maintenance and consignment stock, cannot be covered by a twelve-person subsidiary.
That makes the value-added distributor something different from a warehouse with vans. Its asset is the clinical relationship and its service capability, and that is what European consolidators have been aggregating for ten years: Asker has made more than thirty acquisitions in northern Europe, Mediq and Duomed a dozen each, Palex more than twenty since 2016. Behind each of them there is, or has been, a fund, and behind the fund a simple logic: recurring consumables revenue, non-cyclical demand, a base of family-owned distributors fragmented by specialty and region, and a scale that makes it possible to negotiate with the manufacturer as a multi-country channel, absorb regulatory costs and serve tenders that SMEs cannot reach.
That leaves the question any investment committee asks: what happens when the manufacturer decides to go direct? The multiple depends as much on that answer as on EBITDA.
How a pan-European platform is built from Barcelona
Palex was founded in 1955 as a hospital distributor in Barcelona and is today the largest independent value-added medical technology distributor in southern Europe. It is the clearest case study in the sector because four funds have invested in it in less than ten years: Corpfin in 2016, Ergon in 2020, Fremman in 2021 and Apax as controlling co-shareholder in 2023. At each entry, the asset being bought was different from the one bought the time before.
When Fremman came in, Palex had 625 employees and twelve acquisitions behind it, and operated in Spain and Portugal. From there the scale changed: Gada in Italy, Duomed in Benelux, Launch Diagnostics in the United Kingdom, Anandic in Switzerland. And in parallel, the detailed work that never makes the headlines: Isoder, Arium and A. Salgado in Portugal, Normedan in Navarre. It closed 2024 with €939 million in sales and €145.6 million in EBITDA, with Spain accounting for 43% of the business and debt of around €900 million, slightly more than six times EBITDA.
Two readings. The first: each shareholder paid for EBITDA built through acquisitions and geographic breadth, not for a re-rating of the market; multiple expansion, where there was any, came from becoming the channel through which a manufacturer covers five countries at once. The second is less comfortable for anyone reading this from a €15 million distributor: the Iberian consolidation of general hospital distribution has already happened. What remains are bolt-on acquisitions and niche platforms, and the price of a bolt-on is not the price of a platform.
“The fund does not buy the contract with the manufacturer. It buys the reason why the manufacturer does not want to do without the distributor.”
What the buyer examines before talking about price
A distributor’s income statement sets the starting price. The adjustments, and a good part of the multiple, come from four areas that do not appear in it.
Distribution contracts. Exclusivity, term, notice period and, above all, the change-of-control clause: if the two main manufacturers can terminate the contract when the shareholder changes, the company is not worth what its owner thinks until those consents have been managed, and they are managed before the process, not during it. The buyer also looks at how much gross margin is concentrated in the top three suppliers and what happens if one of them leaves.
The tender portfolio. Remaining life of each award, historical renewal rate, weight of formal contracts versus minor contracts. The buyer models what happens if the largest award is not renewed, and the result shapes both the price and the structure.
Normalised working capital. Public-sector collection at 96 days, stock peaks ahead of each tender, consignment stock in hospitals, pending rebates. This is where much of the gap between the headline price and the money that actually reaches the seller is decided: the working capital adjustment is calculated on a twelve-month average, not on the year-end snapshot.
People and regulation. The sales rep who has the surgeon’s phone number is a key-person risk, and the buyer structures it through retention or deferred consideration. The regulatory file that the Medical Devices Regulation requires of importers and distributors is a fixed cost that scale dilutes and that is often incomplete in an SME; the simplification proposed by the Commission in December 2025 will ease part of that burden once approved, and until then an incomplete file translates into a discount.
With those four areas resolved, the question of the manufacturer going direct has an answer, and the multiple moves closer to what the platform pays for what it lacks. Without them, the price is paid for volume.
Selling to a platform that already exists
Private equity doubled its healthcare investment in Europe in 2025, to around $59 billion, and in medtech deal value also doubled, with 20% more transactions; in Spain, healthcare accounted in 2024 for more than a fifth of all private capital investment, second only to technology. In healthcare distribution, that buyer is very likely to be a platform that already exists. For the owner of a distributor with between €5 million and €30 million in revenue in southern Europe, the decision is not whether to present the business as a platform, because it is not one, but which of the platforms active in its specialty is missing exactly what it has.
The gaps are specific, and the deals of the past year show it. Palex bought A. Salgado for orthopaedics in Portugal, a country where it was already present, and Anandic for critical care in Switzerland, where it only had endoscopy and surgery. Saesco Medical, the Barcelona-based minimally invasive surgery distributor backed by Miura since 2025, has added Cardiolink in Spain, Rivolution in Germany and Medcomp in Milan in twelve months: a portfolio, a country and a specialty. None of those companies was sold as a platform; each was sold as the piece a platform was missing. The opposite case also exists: Mediq, with around €100 million in EBITDA and more than a decade with the same fund, was put up for sale at the end of 2024 for more than €1 billion and the process stalled: it offered size in a sector where price grows little.
That exercise reverses the usual process. Instead of casting a wide net and waiting for offers, you identify the gap and prepare the company for the specific examination that platform is going to carry out: contracts, tenders, working capital and team. The gap between the price of a bolt-on that fits and one that only adds revenue is not negotiated at the table; it is determined by what appears when the buyer looks.
We have seen that examination from the side that sets the price. The most useful lesson is not how to negotiate it, but what the distributor has already resolved when the buyer finds no reason to adjust.
Sources
- MedTech Europe, The European Medical Technology Industry in Figures — Facts & Figures 2025
- Fenin, Informe del sector de tecnología sanitaria en España 2025 (September 2026) and Los fabricantes de tecnología sanitaria en España (December 2025)
- Fenin, evolution of regional government debt to the medical technology sector (2025)
- Roland Berger, European Medical Technology Distribution — An attractive opportunity for investors (2023)
- Fremman Capital, press releases on the acquisition of Palex (2021) and of Gada (2022)
- Apax Partners, press releases on Palex Medical (2023) and the Palex–Duomed combination (2024)
- elEconomista, Palex 2024 results and acquisition in Portugal (July 2025)
- ECO / Jornal de Negócios, acquisition of A. Salgado Distribuição by Lusopalex (June 2025)
- Alimarket, acquisition of Anandic Medical Systems by Palex Group (October 2025)
- Saesco Medical and Miura Partners, release on Miura’s entry and the acquisition of Cardiolink (November 2025); BeBeez, acquisition of Medcomp (May 2026)
- Octus, Mediq sale process stalls amid valuation mismatches (January 2026); Bloomberg, relaunch of the Mediq sale (November 2024)
- Bain & Company, Global Healthcare Private Equity Report 2026 (January 2026)
- SpainCap, Informe 2025. Venture Capital & Private Equity en España (2024 data)
- European Commission, proposal COM(2025) 1023 revising the MDR and IVDR Regulations (December 2025)
