Private Equity Firms Invest in Contract Manufacturing Industry Amid Healthcare Boom

Private-equity firms see opportunity in healthcare contract manufacturing, with Bain Capital and Kohlberg backing PCI Pharma Services in a $10 billion deal. Novo Holdings acquired Catalent for $16.5 billion and sold three plants to Novo Nordisk for $11 billion. The sector is attractive due to pharmaceutical companies' need for faster and cheaper medication development.

Private-equity firms are increasingly recognizing the potential in healthcare contract manufacturing, as evidenced by recent deals involving PCI Pharma Services and Catalent. Bain Capital and Kohlberg recently backed PCI Pharma Services in a $10 billion deal, while Novo Holdings acquired Catalent for $16.5 billion and sold three plants to Novo Nordisk for $11 billion. These transactions underscore the sector's attractiveness, driven by pharmaceutical companies' need for faster and cheaper medication development.

The global medical device contract manufacturing market is projected to grow at a resilient CAGR of 10.9% from 2025 to 2030, reaching a valuation of $140.84 billion by the end of the period [1]. This growth is fueled by rising demand for complex medical devices and increasing healthcare costs, which encourage outsourcing to specialized contract manufacturers. The cytotoxic drugs and HPAPI manufacturing market, which is estimated to grow at a CAGR of 11.6% from 2025 to 2035, also presents significant opportunities for contract manufacturing [2].

Key players in the medical device contract manufacturing market include Flex Ltd., Jabil Inc., and Sanmina Corporation, among others. These companies offer a range of services, from primary and secondary packaging to labeling and ancillary services, contributing to the sector's robust growth. Similarly, the cytotoxic drugs and HPAPI manufacturing market is characterized by a growing trend of outsourcing, with many big pharma players investing in new facilities to capitalize on lower manufacturing costs and supportive regulatory landscapes in developing countries.

The increasing trend of outsourcing in both medical device and cytotoxic drug manufacturing highlights the sector's potential for growth. Private-equity firms and pharmaceutical companies alike are recognizing the strategic and cost-effective benefits of contract manufacturing. As the market continues to grow, it is likely that we will see more investments and acquisitions in this sector.

References:

[1] https://www.prnewswire.com/news-releases/medical-device-contract-manufacturing-market-worth-140-84-billion-by-2030-with-10-9-cagr--marketsandmarkets-302536504.html
[2] https://www.globenewswire.com/news-release/2025/08/21/3136966/28124/en/Cytotoxic-Drugs-HPAPI-Manufacturing-Market-Industry-Trends-and-Global-Forecasts-to-2035-Over-140-Players-Now-Active-in-HPAPI-Cytotoxic-Drug-Contract-Manufacturing.html