The Unique Challenges of Selling a Medical Devices Business

November 4, 2025

Selling a business which produces or distributes equipment or devices used for medical purposes presents a unique set of challenges which can be more complex to navigate than selling most technology related businesses.

From regulatory compliance to intellectual property and contractual obligations, sellers must navigate a landscape that demands careful preparation to maximise sale value and minimise post-completion liabilities.

For a business owner that is considering selling a medical devices business, it is essential to address these issues well in advance—ideally years before initiating the transaction—to ensure a smooth and successful outcome. A failure to do so can lead to delays in the timeline of the transaction, a prospective buyer not proceeding with the transaction at all, or the seller(s) not receiving as good a deal as they anticipated. 

There are a few areas to consider here:-

Intellectual Property Considerations for a Medical Business Sale

Intellectual property (IP) assets are often the most valuable components of a medical devices  business.

A prudent buyer will assess the strength, scope and enforceability of any IP rights thoroughly during their due diligence process. A failure to document these properly increases the chances of buyers:

  1. renegotiating the terms of the deal – to include indemnities (i.e. rights to financial compensation after completion) for IP specific risks. This may also involve holding back as a retention, or worse reducing, the purchase price payable for the business;
  2. requiring rectifications to be made before completion to ensure they receive the full benefit and title of the IP.

Prior to a sale, a prudent seller should conduct a full internal review of their IP assets to determine any vulnerabilities and address them well in advance of completion. Typical areas where sellers fall short include:

  1. no or unclear IP assignment clauses in key employee contracts; and
  2. lapsed patents or trademarks.

Our IP Team’s “IP audit” offering can prevent these mistakes by both identifying the IP a business currently has and advising on ways to better protect that IP.

Regulatory Compliance Requirements for a Medical Business Sale

Medical devices businesses are subject to stringent regulatory oversight, with the Medicines and Healthcare Products Regulatory Agency (MHRA) playing a central role in the UK.

Non-compliance can result in serious consequences, including product recalls, fines, and even criminal liability.

Buyers of a medical devices business will investigate regulatory compliance thoroughly. Discovery of unresolved issues or ongoing investigations may delay the transaction or lead to demands for indemnities.

Sellers should proactively audit their regulatory standing and resolve any deficiencies before entering the market.

Change of Ownership Considerations

Business owners will encounter several definite and circumstantial requirements when they either attempt to:

  1. sell the shares in a company which owns or distributes medical devices (Share Sale); or
  2. the company itself sells the underlying products and assets of the business (Asset Sale),

which may require notifications to be made, or permissions granted, before the company can be sold.

National Security and Investment Act 2021 (NSIA) – the NSIA requires the government to be notified and provide approval for acquisitions in 17 sensitive sectors.

The NSIA came into force to enable the government to intervene in takeovers and mergers to protect national security, of which medical devices companies may fall into a number of these 17 key sectors. One prominent example would be the category for “Suppliers to the Emergency Services”, which would potentially capture any medical devices company which supplies emergency services with their products.

An NSIA assessment should be a standard part of sale planning, since the penalties for completing a transaction subject to mandatory notification without obtaining prior approval can be serious. These include the transaction being voidable, fines and even criminal sanctions for directors.

Contractual Change of Control & NHS Procurement Frameworks – before a Share Sale, Buyers will review contracts for change of control clauses that could trigger termination or renegotiation of the relevant control upon the Share Sale occurring. For key customer contracts, sellers may need to obtain waivers from the relevant third parties to preserve commercial relationships.

Medical devices companies operating under NHS procurement frameworks must be especially vigilant. A change in ownership may require notification to the relevant NHS body, which could reassess the buyer’s suitability and decide whether to continue the engagement.

MHRA Registration – when registration of a medical products product is granted, it is specific to the legal entity given the relevant permissions, meaning:

  1. if an Asset Sale results in a new legal entity becoming the manufacturer, the new entity must re-register the product with the MHRA; or
  2. if on a Share Sale the name, contact details or address of the relevant company will change on or shortly after completion, the MHRA registration must be updated promptly to ensure it remains accurate.

ISO 13485 Certification – ISO 13485 is an internationally recognised standard and certification for medical products. Whilst not a legal requirement for medical products to be certified with it, certain products typically are to ensure they meet UK legislation requirements.

Before a sale, it is essential to revisit and check whether any of your medical devices contain ISO 13485 Certification and to consider this in line with the structure of the transaction:

  1. on a Share Sale policies and records ought to be checked thoroughly to see if any bespoke notifications or permissions have been included; and 
  2. on an Asset Sale, certificates are non-transferable between the seller and the buyer. Depending on to whom the devices are being sold, the certifying body may have to be notified and carry out an audit before permission is granted to ensure the new company is in adherence to the ISO standards.
Final Thoughts

Selling a medical devices business involves navigating a complex regulatory and commercial landscape. Early preparation is key to ensuring a successful transaction.

At Herrington Carmichael, our Corporate, IP and Regulatory specialists are well-equipped to help prepare you for sale years in advance and guide you through the sale process itself.

To learn more about how we can assist, please contact us.

Stephen Taylor
Solicitor, Corporate
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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