10 Key Factors affecting the Enterprise Value to Equity Value bridge in European MedTech and HealthTech 2026

The enterprise value (EV) to equity value bridge represents the critical calculation that determines what shareholders actually receive in a transaction, the difference between a buyer's headline offer and the cash distributed to founders and investors.

In the European HealthTech and MedTech sectors entering 2026, this bridge calculation has become increasingly complex, driven by structural market shifts including the end of the zero interest rate policy (ZIRP) era, heightened regulatory compliance burdens under MDR/IVDR, refinancing pressures from 2019-2021 vintage debt, and the maturation of the sector from "growth at all costs" to "industrial efficiency."
 
This report examines the ten most significant factors affecting the EV to equity value bridge, ranked by their typical financial impact and prevalence in 2026 European HealthTech and MedTech transactions. Each factor is analysed through the lens of current market conditions, including the €2.5 Trillion private equity dry powder deployment cycle, distressed M&A driven by regulatory Darwinism, and the flight to quality favouring profitable, compliant platforms over high-burn ventures.
 
Understanding these bridge factors is essential for founders, investors and acquirers navigating an environment where enterprise values for AI-enabled, MDR-compliant assets command 6x-8x revenue multiples and 12x-15x EBITDA multiples, while non-compliant or sub-scale assets face distressed exits at 3x-4x revenue.
 
10 Key Factors affecting the Enterprise Value to Equity Value bridge in European HealthTech and MedTech 2026
 
1. Net Debt Adjustment
2. Preferred Stock Liquidation Preferences
3. Working Capital Adjustments
4. Transaction Costs and Advisory Fees
5. Earn outs and Deferred Consideration
6. Escrow and Holdback Provisions
7. Minority Interest and Non-Controlling Interest Adjustments
8. Pension Liabilities and Unfunded Obligations
9. Options, Warrants and Dilution
10. Normalised EBITDA Adjustments and Other Balance Sheet Items
 
The ten factors examined, net debt, liquidation preferences, working capital adjustments, transaction costs, earn outs, escrows, minority interests, pension liabilities, dilution, and EBITDA normalisation, collectively determine the translation of headline enterprise values into actual cash distributed to founders and investors. In an environment where AI-enabled, MDR-compliant assets command 12x-15x EBITDA multiples while non-compliant or sub-scale assets face distressed exits at 3x-4x revenue, understanding these bridge mechanics is essential for maximising shareholder value.
 
Source: https://www.healthcare.digital/single-post/10-key-factors-affecting-the-enterprise-value-to-equity-value-bridge-in-european-healthtech-and-medt