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The generation of founders from the 1960s and 1970s is gradually retiring. This also affects small and medium-sized medtech companies, that is, owner- or family-run medium-sized businesses in the medical technology sector. According to KfW Research, approximately 109,000 small and medium-sized companies plan to arrange for succession each year through the end of 2029. At the same time, around 114,000 companies per year are considering shutting down. In 2024, the DIHK recorded nearly 10,000 consulting sessions with companies willing to hand over ownership, representing a 16 percent increase over the previous year. Around 5,620 businesses were unable to find a suitable successor.
In the medtech SME sector, the situation is particularly challenging, as a company’s value lies not only in machinery and revenue but also in regulatory approvals, quality processes, and personal customer relationships. Succession is therefore no longer purely a family matter but a strategic management and planning task. This applies to owners as well as executives who are considering a succession role.
Anyone who transfers ownership of a medtech company is passing on far more than just a business model. The MDR (EU Medical Device Regulation, Regulation (EU) 2017/745) remains legally binding following a change in leadership. It governs the requirements for the safety, authorization, and market surveillance of medical devices. This also applies to the QMS (Quality Management System, a documented system for structuring processes, responsibilities, and quality assurance).
Unplanned transfers can lead to unclear regulatory responsibilities, the discontinuation of CAPA measures (Corrective and Preventive Actions, i.e., measures to correct and prevent quality deviations), and a loss of trust among customers and regulatory authorities. KfW also points out that asking prices for company acquisitions have risen by approximately 34 percent in nominal terms. Anyone entering a transaction without a succession plan weakens their negotiating position.
This also has consequences in the labor market: Qualified executives avoid companies with unclear succession processes. Transparent planning is a fundamental prerequisite for reliable career prospects and, consequently, for the attractiveness of a succession position.
No single option is inherently superior. Context, the owner’s goals, and the availability of suitable candidates are the deciding factors.
Internal succession: An existing executive takes over. They are familiar with the products, customers, and company culture, but are not automatically suited for ownership responsibilities.
External succession: This brings industry experience and a fresh perspective, but requires a structured onboarding process.
Family succession: This ensures continuity, but family ties are no substitute for leadership skills or regulatory training.
Sale to a strategic buyer or financial investor: This is a deliberate business decision, not a failure. The crucial question is not: Who will pay the highest price? But rather: What future should the company have?
MBO (Management Buyout, a form of acquisition in which the existing management team purchases all or part of the company): Here, continuity is combined with entrepreneurial responsibility. Financing is often the biggest hurdle in this process.
Starting early is the most important factor. While a lead time of three to five years is not a legally mandated requirement, it serves as a useful guideline for medtech companies. According to the DIHK, however, about 38 percent of retiring owners do not begin planning until one to two years before they step down. For companies dealing with regulatory complexities, this is often too short a timeframe, as the search for candidates, the QMS audit, the evaluation, and the transfer of knowledge all take place simultaneously.
In our consulting practice, we regularly observe that communication is a crucial and often underestimated factor. Employees need clear answers early on: What will remain the same, what will change, and who will make decisions in the future? A lack of information is filled by rumors, and in a tight labor market, there is a risk of losing key personnel. Hospitals, distributors, and Notified Bodies (organizations accredited by national authorities that test and certify medical devices under the MDR) need clear signals to the outside world regarding operational continuity.
Structured knowledge transfer requires designated individuals, time, and verifiable results. Explicit knowledge, such as contracts and technical documentation, is transferable. Implicit knowledge, such as decision-making logic and personal contacts, must be secured through joint meetings and a targeted handover. A joint transition period of six to twelve months can be helpful in this regard, provided that roles and decision-making authority are set forth in writing.
A succession role at a mid-sized medtech company can offer more creative freedom than a traditional corporate position, with genuine entrepreneurial responsibility. Four key considerations are crucial here.
Stability and Transparency: Why is the succession taking place now? What economic or regulatory risks remain? How concentrated is the customer base?
Transition Structure: How long will the current leadership remain, and in what capacity? Phrases like “will serve in an advisory capacity” are too vague. Duration, decision-making authority, and availability must be set forth in writing.
Scope of Authority: Who is authorized to make which decisions? Who is responsible for the budget, personnel, and regulatory affairs (the area responsible for ensuring compliance with regulatory requirements and approval processes in a regulated environment)? Without clearly authorized decision-making authority, the role is risky.
Development prospects: Which markets, products, and structures should be further developed? The most attractive succession position combines a stable foundation, a clear handover, and a credible development agenda.
In our industries, we observe that companies that proactively address these questions attract significantly more qualified candidates. It is therefore worthwhile for business owners to put these four points in writing before approaching potential successors.
Succession planning in medium-sized medtech companies is not only a personal matter for the owners, but also a time-sensitive and strategic challenge. Data from KfW and DIHK show that competition for suitable successors is intensifying. Planning early on safeguards the company’s value, regulatory continuity, and the trust of the workforce.
For executives, a succession role is not a stopgap measure but an opportunity to shape the future of the company, provided the conditions are right. External support in tax, legal, M&A, and regulatory affairs is not a cost center but an investment in continuity.
If you are looking for qualified and motivated specialists and executives for your company, we can support you with our specialized network. Especially when filling succession and executive management positions in mid-sized medtech companies, industry experience, an understanding of regulatory requirements, and the right personal fit are crucial. For over 15 years, the recruitment consultants at BESTMINDS have been filling vacancies in the medical technology, healthcare, life sciences / pharma, energy / utility, and IT / media sectors with a wealth of expertise and dedication. We find the right candidates for you in a fair, loyal, and discreet manner. Contact us for a no-obligation initial consultation so that we can fill your vacancies quickly and effectively.
