The effects of the market-wide contraction were seen across multiple metrics in Q2 2022. Public market returns were negative across all verticals, with valuations falling sharply. Most sectors, with the exception oflab diagnostics, infection control & reprocessing, and large diversified, underperformed the S&P 500. CMO M&A transaction activity was down, as were private financings and OEM disclosed value. The number of OEM M&A transactions, however, did manage to increase despite market concerns.
M&A transaction activity levels dropped for both OEMs and CMOs in Q1 2022, showing initial signs of a broader industry decline. Poor returns in the public market supported this move toward contraction, with the main remaining source of strength coming from continued elevated financing. Almost two thirds of our tracked sectors in the medical devices category witnessed lowerstock price momentum versus the S&P 500, signaling a broader market downturn. Multiple sectors still outperformed, however, including infection control & reprocessing, lab diagnostics, and ENT & respiratory.