Tuck-in acquisitions are a major part of the big medtech companies’ strategies, especially at the likes of Medtronic and Johnson & Johnson.
Speaking on a panel titled MedTech M&A 2025: Navigating the Next Wave of Deal-Making at AdvaMed’s The MedTech Conference in San Diego, leading figures from some of medtech’s biggest names offered their insights into the inner workings of M&A in the industry.
The panel included Medtronic VP and Global Head of Corporate and Business Development, M&A and Venture, Chris Eso, Johnson & Johnson Head of Business Development Jennifer Kozak, Vantive CFO Jim Hinrichs and Perella Weinberg Partners Partner Philippe McAuliffe. EY-Parthenon Partner John Heinbigner moderated.
Here are some of the biggest takeaways from the conversation in San Diego. (And Johnson & Johnson MedTech Worldwide Chair Tim Schmid will be among top medtech leaders discussing M&A strategy during our DeviceTalks West show next week — Oct. 15–16, 2025 in Santa Clara, California. Register here. Here’s a 25% off discount code: MD25OFF)
Johnson & Johnson views M&A as a major part of its strategy
Johnson & Johnson is no stranger to tuck-in acquisitions, especially for its MedTech business. Kozak explained that the medtech giant will continue looking at deals that bolster its portfolio.
“M&A has and will continue to be an important part of our strategy,” Kozak said. “Our strategy has been about shifting our portfolio to higher-growth, higher-innovation spaces where there’s a significant amount of need and where we can serve patients, customers and all of our stakeholders.”
Recent noteworthy buys include Shockwave Medical, V-Wave, Laminar and Abiomed within the past few years. Kozak said that the larger deals (Abiomed cost about $16 billion and Shockwave cost about $13 billion) have performed well and should deliver long-term value creation.
However, the company wants to keep its focus on all types of moves in the M&A market.
“For us, it’s not about big or small,” Kozak explained. “It’s really about a better strategy and fit. … It’s about how we can continue to shift our portfolio and serve patients at the end of the day.
Recent insights from Medical Design & Outsourcing: How Shockwave Medical sealed the deal that could put Johnson & Johnson back on top
Medtronic remains active on the tuck-in front, too
Eso echoed Kozak and J&J, saying that Medtronic looks at tuck-in acquisitions to transform lower-growth businesses into higher-growth units while adding to its portfolio.
“We look at how we shrink to grow and look at where we have a right to win in those markets,” Eso said. “Where do we have a competitive advantage and core competencies? We’re looking across our whole portfolio for where we should be making strategic investments and strategic bets to drive the biggest long-term impact from both a patient care and a revenue perspective.”
Tuck-in M&A, Eso says, has been a key avenue for Medtronic, with about 11 or 12 acquisitions in the last five years, he noted.
“We’ll continue to do that and then we’ll look for larger, more publicly announced deals that make sense and fit our strategic framework,” Eso said. “
Still, Medtronic has to consider its investors and make difficult decisions, Eso said. While it continues to hunt on the M&A front, it also continues evaluating itself internally. That resulted in the “very tough decision” to separate the company’s Diabetes business, which was announced earlier this year.
He said Diabetes is a high-growth business but one that required more investment at a level Medtronic couldn’t deliver.
“Profitability is critically important, being a publicly traded company and the size that we are,” Eso explained. We continue to make progress there and advance that, but we can’t just turn a blind eye to growth as well. We’re balancing that every step of the way, looking for investments that we can use to either drive near-term profitability or growth while also looking at our overall portfolio to improve on that profitability. A case in point is our Diabetes separation.”
Recent insights from MDO: Medtronic’s diabetes split could be a shot in the arm for both
Private equity plays a massive role
Kozak and Eso had their say on private equity’s role in medtech M&A, too, while Hinrichs, who is CFO for a company formed through a sale to a private equity firm, also offered insights.
Kozak:
“Private equity has been a great partner to us at J&J MedTech over the years. Over the last 10 years, we have a pretty consistent and robust portfolio optimization process. Every year, we’re looking at our portfolio and where we need to drive growth and need to consider sustaining leadership and where do we need to think about certain businesses that could be great businesses but etiher are just not strategic to us or not getting the investment they need. Over the last 10 years, we’ve divested a lot of businesses and private equity has been a partner to us in many of those. … You talk about all these pieces in the medtech ecosystem that need to be working and I think private equity is a big piece in that, too.”
Eso:
“We entered into a relationship with Blackstone to basically fund several programs in our diabetes franchise. We had a steering committee and a plan we’re working on. They take on the risk of development, but we’re the executing arm of it. … From their perspective, they’re investing in Medtronic and our capabilities in a space where we want to, but it just needs additional investment. What we get is the benefit on the P&L on the front end and the back end. It’s a very nice partnership that we’ve had. We actually learned this from Pfizer. They do this on the pharma side quite a bit. Medtronic was, I think, the first in medtech and probably still the only one that’s done that. … We look at private equity as a partner at the end of the day.”
Hinrichs:
“PE can step in and make a big difference. I was having dinner with a friend and he asked me how I liked [my role] and I said, well, I wish I had discovered the private equity thing 20 years ago. … The definition of value creation is a little different. It’s a different time horizon. When dealing with our owners, Carlyle, the quarters matter, but the question we are always asking ourselves is, ‘is this investment worth it? Is this decision we’re making creating value three, four, five years from now as we think about exit?’ … We are able to do things and make very difficult decisions that would be hard to do as a public company around what our footprint and portfolio look like or what we do with certain businesses that aren’t strategic or are less profitable than we’d like them to be. … This is my fifth CFO job and my first PE-backed job and it’s been really interesting.”
