Regarding distribution entities, are most of them generalized, catering to various niches, or are there many hyper-focused, narrowly-minded distributors? How does preference differ between the two? Is one better than the other?

The dynamics with the MedTech distributor are sensitive due to the dependency on suppliers. Smaller players often rely heavily on a few suppliers, which is risky because suppliers might change distributors or set up their own sales organizations. A more diversified distributor is preferable, but that comes with a higher price tag. Often, distributors are very focused. For instance, a German company might only deal with elderly care centers in southern Germany. National players are fewer, and there aren't many platforms with a $50 million top line to bolt on. When evaluating these companies, you often find more focused companies without widespread skills, especially in medical equipment. Companies might specialize in a niche like anesthesia, with contracts with larger OEMs. Buying such a company means playing in the anesthesia field in that country, but not necessarily elsewhere. Over time, you build a decentralized, fragmented structure, which is good for diversification but doesn't always bring strong synergies.

Can you explain the multiples for a small transaction versus a larger platform and how they differed between countries?

First, you need to distinguish between consumables and medical equipment. Consumables companies can trade anywhere from four to eight times. We saw deals where synergies were possible, and that is on a non-synergized basis. As you move up in size, even with consumables, multiples range from 8 to 12 times, but rarely above 10 times. For sizable M&A of $100 million in top-line revenue, the multiples increased.