Strategic Spinoffs: Why Some MedTech Giants are Choosing Divestures over Diversification

This year began with significant uncertainty for the healthcare market due to proposed tariffs, potential CMS policy and reimbursement changes, and overall financial market challenges. In the second half of 2025, we are seeing more decisive action in MedTech, both from venture capital investment and acquisitions of growth stage companies.

But a trend is starting to develop in the other direction as well. Some MedTech giants are looking to streamline their diverse portfolios, spinning some divisions off into new companies. 

The largest MedTech firms have pursued diversification for decades, knowing that covering multiple product categories, geographic markets, and customer segments provided a buffer against risk. This is a time-tested strategy in many industries; mature companies can reduce R&D costs due to natural competitive barriers such as brand loyalty or significant efforts in switching products. But as a recent McKinsey report noted, this strategy doesn’t work quite as well in the unique MedTech market for multiple reasons:

• Mature products face constant threat from new technology, meaning that even well-established divisions need to maintain R&D investments and other significant overhead costs.
• MedTech sales provide smaller margins than other industries, so diversification doesn’t necessarily mean one powerhouse business unit is able to prop up struggling siblings. 
• Highly competitive, fully developed markets are more susceptible to downturns, a significant risk to units with high overhead costs.
• Clinical needs, market fits, and sales cycles vary wildly in MedTech. Selling low volume / high cost capital equipment and high volume / low cost wound care requires two completely different strategies. Large MedTech companies may already have multiple business units operating essentially independently of each other, reducing the effect of the synergies a broad portfolio brings to other industries. 
• The modern healthcare market demands speed, specialization, and innovation. Large, slow-moving organizations can struggle to respond nimbly to shifting customer expectations, pricing pressures, and regulatory challenges. 

As McKinsey notes, investors have taken notice of these challenges, with large MedTech companies delivering smaller returns compared to similar size companies in other industries. 

For the divisions that have been spun off into their own entities, their new freedom and agility can unlock different go-to-market strategies. But they’ve lost significant branding power, resources, and operational capacity. They also need to explain to their customers why this change is beneficial to them. 

But above all, finding avenues to new growth is a key concern. Lean teams that need to quickly uncover high-value opportunities should shift to thinking like a growth-stage company. AcuityMD’s AI platform for MedTech can not only show these companies exactly where their best opportunities are for growth, they can do so with maximum speed and efficiency so these companies can begin developing revenue streams and prove their market fit. 

With new teams and different resources, sales leaders at these companies can also benefit from AcuityMD Territories, which allows them to see exactly where they should align their resources, and simulate the effects of proposed changes with just a few clicks. 

As these spinoffs are most likely competing in mature markets with distinct competitors, AcuityMD Care Journeys can show them the existing referral patterns between physicians in their market. By seeing the upstream and downstream referrals of their targeted physicians, they can plan detailed outreach and educational events to show these physicians why their technology can deliver better clinical and financial outcomes.  

With these spinoffs likely to increase in 2025, sales leaders at these new organizations must be ready to move quickly. Using precise market data and simple workflows will allow them to hit the ground running and establish their new companies as decisive market factors.