What Acquirers Look At in the Commercial Function Before a Medical Device Acquisition
Your clinical data holds up. Your FDA clearance is two years old. A strategic acquirer sits across the table and says they love the technology. Then diligence starts, and almost none of the questions are about the device.
Medical device companies M&A gets decided in the commercial function: revenue consistency, pricing discipline, and how many people inside the acquirer already know your name before the deal team shows up.
Key Takeaways
- Acquirers weight commercial track record as heavily as clinical data. Axonics closed its exit to Boston Scientific after 20 consecutive quarters of beating analyst expectations, not after a single strong trial readout.
- Pricing and reimbursement strategy set years before a deal signal market maturity to a buyer. Waiting until diligence to think about pricing reads as a company that doesn't understand its own market.
- Relationship depth with a strategic acquirer compounds over years. By the time Boston Scientific moved on Axonics, its CFO, R&D, commercial, and legal teams already knew the company.
- Prometheus Biosciences forced a $10.8B competitive bid from Merck by proving it could fund its own Phase 3 trial, removing the acquirer's leverage before talks began.
- The commercial function that gets diligenced hardest is the one investors and boards check last: whether the company can win without the acquirer.
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Why Acquirers Diligence the Commercial Function Before the Technology
A strategic acquirer already trusts your clinical data. Their own scientific and regulatory teams vetted it months before the term sheet, and if it didn't hold up, this conversation wouldn't be happening.
What they haven't vetted is whether your commercial function can survive contact with their sales organization, their pricing committee, and their existing accounts.
I covered this on a recent episode breaking down $17B in medtech exits:
"Nobody finds you in medtech exits. You have to engineer a way to get found. And that involves crafting the right narrative. Founders who have done it best spend years building that outcome, so that showing you don't need to sell is your best negotiator."
That's the part founders skip. They treat commercial traction as a sales metric to report on a board slide, not as the evidence an acquirer's diligence team will spend six weeks stress-testing.
In medtech M&A, revenue proves a market exists and that your organization, not just your device, can hold it.
How Revenue Consistency Signals Acquisition Readiness
The single number a strategic acquirer's commercial diligence team returns to more than any other is consistency, not size. A company that posts one breakout quarter looks lucky. A company that posts twenty in a row looks structural.
"Twenty consecutive commercial quarters of beating analysts' expectations... You've got to go out and really light up the scoreboard. Repetition is deliberate."
— Ray Cohen & Tom West (The State of MedTech)
Ray Cohen's run at Axonics before its $3.7B sale to Boston Scientific is the reference case for this. It wasn't one hero quarter that convinced Boston Scientific to move.
It was two decades of quarters that made the outcome look inevitable rather than lucky, which is exactly the distinction a diligence team is paid to find.
Ray Cohen and Tom West described the mechanics of that relationship on stage at MD&M's 2026 keynote. Boston Scientific didn't arrive at the acquisition cold.
It had already taken a position through an earlier funding round. It tracked the company's commercial performance through that stake, and moved to acquire only once the pattern was undeniable.
The eventual headline deal value and the equity Boston Scientific already held were two different numbers, because the relationship had been compounding for longer than the announcement suggested.
Founders read "consistent revenue" as a sales team problem. Acquirers read it as evidence the market-product fit is real and repeatable without founder heroics propping it up every quarter.
Why Pricing and Reimbursement Timing Shapes Deal Value
Pricing strategy is one of the last things founders think about and one of the first things a strategic acquirer's commercial diligence team pulls apart.
"Engineer your pricing and reimbursement economics early. This sounds like common sense, but a lot of people don't do this. Pricing isn't really just about revenue. It's essentially how you signal market maturity and acquisition readiness."
A device with strong adoption numbers but no coherent pricing logic tells an acquirer the company grew despite its commercial strategy. That's a red flag in diligence.
It means the acquirer inherits the job of building pricing discipline post-close, on top of everything else integration requires.
A device with clean, defensible pricing and a reimbursement pathway that's been proven at scale shows the company already thought the way the acquirer needs it to think.
This is where the medtech commercialization strategy work has to start, well before a company is thinking about an exit.
Reimbursement coding decisions made two years before a deal conversation are exactly what a diligence team reconstructs when it decides what the business is worth.
How Relationship Maturity With the Acquirer Changes Negotiating Leverage
The founders who negotiate the best terms are rarely negotiating with a stranger. They're closing a relationship that's already years old.
"It takes years. In my experience, you spend years cultivating relationships with strategics. By the time Boston Scientific moved, their internal familiarity with Axonics was already distributed across the CFO, R&D, commercial, and legal teams."
That distribution matters more than founders expect. A deal championed by a single VP inside the acquirer collapses the moment that VP changes roles or loses political capital.
A deal where the CFO, the R&D lead, the commercial team, and legal have all independently formed a view of your company survives internal reorganizations, leadership changes, and competing priorities, because no single departure kills it.
I interviewed Mark McKenna, CEO of Prometheus Biosciences, on an episode covering the company's $10.8B exit to Merck. He described the exact positioning that produced a competitive bid instead of a take-it-or-leave-it offer:
"You need to have the competitive threat that you can do it on your own. You need to signal the fact that you're not for sale, but you're open to a dialogue, and willing to act reasonably. But we're not for sale."
— Mark McKenna, CEO of Prometheus Biosciences (The State of MedTech)
Prometheus backed that stance by showing it had the balance sheet to fund its own Phase 3 trial if no acquirer met its price.
That's the leverage a mature commercial and clinical relationship with multiple potential acquirers buys a company, and it's why McKenna could hold that line instead of accepting the first number on the table.
What This Means for Medtech Founders
In my experience working with medtech founders, the ones caught off guard in diligence treated commercialization as a scaling problem. They solved it only after the technology was proven, not as evidence they were building for a future buyer the whole time.
Every consistent quarter, every defensible pricing decision, every relationship an acquirer's team can independently verify is diligence work you've already done before anyone asks for a data room.
The founders who get this right don't start thinking about acquirers when a banker calls. They start when they define market-product fit, because the same commercial discipline that wins a market is the discipline an acquirer diligences before writing a check.
If your category is still forming, that discipline has nowhere to attach yet, which is the mistake covered in what a go-to-market strategy misses when the market hasn't formed.
Frequently Asked Questions
What Do Acquirers Look For in Medical Device M&A Due Diligence?
Acquirers weight three things in the commercial function: revenue consistency across multiple quarters, pricing and reimbursement strategy set well before diligence begins, and how many people inside the acquirer's own organization already know the target company through prior relationship-building.
Clinical and regulatory data get vetted separately, but the commercial function is where deal terms get negotiated.
Why Do Some Medical Device Companies Get Higher Acquisition Valuations Than Others With Similar Technology?
Valuation gaps usually trace back to commercial evidence, not technology. A company with twenty consecutive quarters of predictable growth and a defensible pricing strategy reads as a repeatable business.
A company with comparable clinical results but volatile or undocumented commercial performance reads as a bet the acquirer has to de-risk itself, which shows up directly in the offer.
How Early Should a Medtech Founder Start Preparing for Acquisition Interest?
Years before a deal conversation starts. Ray Cohen's run at Axonics and Prometheus Biosciences' negotiating position both came from commercial and clinical discipline built long before a banker was involved.
Acquirers reconstruct that history in diligence, so the preparation has to happen at the point pricing, reimbursement, and go-to-market decisions are made.
Where to Go From Here
If you're doing this yourself: start with the Exit Positioning Score to see where your commercial function would hold up under acquirer diligence today, before a deal conversation forces the question.
If you want it engineered with you: MarketCraft takes on a small number of medtech teams each quarter, starting with The Market Engineering Audit. For companies already fielding acquisition interest, the audit maps exactly where commercial diligence would find gaps before an acquirer's team does.
Listen to the Full Conversations
Ray Cohen and Tom West's conversation at MD&M 2026 and Mark McKenna's breakdown of the Prometheus Biosciences exit are both part of The State of MedTech's ongoing exits series.
- MD&M 2026 Keynote: $6.1B Advice from Ray Cohen and Tom West
- Deconstructing Prometheus Biosciences' $10.8B Exit to Merck with CEO Mark McKenna
- 7 Lessons from $17B in Medtech Exits That Every Founder Must Know
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About the Author
Omar Khateeb is the founder of MarketCraft and host of The State of MedTech, the number one podcast in the medtech industry.
He works with medtech founders and commercial leaders on market engineering, commercialization strategy, and revenue growth. Visit marketcraft.ai or subscribe to The State of MedTech for weekly conversations with the people building the future of medical devices.