ISO 13485 Medical Device Design & Contract Manufacturer, Southwest U.S.

$3.8M

Revenue

$769K

SDE

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Full Editorial Writeup

This is a full-service, ISO 13485:2016 certified contract designer, developer, and manufacturer of Class II and Class III medical devices, including active implantable medical devices (AIMD). The company specializes in cardiovascular, wound care, and neuromodulation devices and components, taking customer concepts from early-stage prototyping all the way through design, development, clinical support, and into GMP manufacturing. It serves both domestic and international medical device customers from an 11,600 square foot facility in the Southwest that houses a cleanroom, production floor, and design offices.

The operating story here is capability, not commodity. The company runs CNC mills and lathes, high-resolution 3D printers, laser markers and cutters, thermal form, cable assembly, an ESD-safe electronic assembly area, and an ISO 7 cleanroom, which lets it build complex devices entirely in-house. Its regulatory infrastructure, including PCB design and testing, human factors, battery life validation, electrical leakage testing, and IPC soldering, is exactly the kind of moat that keeps medical customers from switching once a program is qualified.

Financially it is a clean, high-margin operation: $3.84M in revenue with $769K EBITDA and an average adjusted EBITDA margin of 23.2% from 2023 through 2025. The owner holds the business through a holding entity and is seeking a full exit to retire, open to a transition period and flexible deal structures. For a buyer, this is a regulated, hard-to-replicate contract manufacturing platform with real switching costs and obvious paths to grow both the manufacturing-of-record book and proprietary IP.

Why we like it

Earnings quality is strong for a business this size, with a 23.2% average adjusted EBITDA margin held across 2023 through 2025 and $769K of EBITDA on $3.84M of revenue. Consistent margins over three years suggest disciplined pricing and a mix of work that is not a one-year fluke.
The moat is regulatory and technical, not marketing. ISO 13485:2016 certification, an ISO 7 cleanroom, GMP manufacturing, and the ability to design and build Class II and Class III implantable devices in-house create high switching costs, since customers who qualify a program with this shop rarely re-validate elsewhere without pain.
Medical device demand is durable and largely non-discretionary. Cardiovascular, wound care, and neuromodulation devices get built and shipped regardless of the economic cycle, which insulates the revenue base from the discretionary swings that hit consumer-facing manufacturers.
There is a clear operator angle to expand earnings. The seller flags becoming manufacturer of record for already-cleared devices and growing in-house R&D toward proprietary products, both of which convert episodic project work into more predictable, higher-margin recurring production runs.

How to improve it

Prioritize converting one-off design and development engagements into manufacturer-of-record production contracts for devices that already have regulatory clearance. This shifts the revenue mix from lumpy project work toward repeat, predictable volume runs and improves the multiple a future buyer will pay.
Map and quantify customer concentration in the first 30 days, then launch a targeted outbound campaign to add new device customers. The listing explicitly calls out diversification as an opportunity, which usually signals a top-heavy customer base worth de-risking.
Build out the in-house R&D function to develop proprietary devices the company owns rather than only building to customer specs. Owning IP creates a second, higher-margin revenue stream and gives the business asset value beyond contract labor.
Leverage existing customer and industry association relationships to systematically feed the sales pipeline. Formalize referrals and trade presence into a documented business development process rather than relying on the departing owner's personal network.
Audit capacity utilization on the CNC, cleanroom, and assembly assets to identify where the existing equipment can absorb more volume without capital spend. Filling underused capacity is the fastest path to margin expansion given the fixed-cost footprint.
Institutionalize the regulatory and quality knowledge that likely sits with the owner and a few key staff. Document the ISO 13485 and GMP processes into transferable SOPs so the business does not carry key-person risk through the sale.

Diligence notes

Get the customer concentration breakdown by revenue and by gross margin. The seller's emphasis on diversifying the base hints that a handful of accounts may drive most sales, and losing one during transition could materially dent the $769K EBITDA.
Separate design/development project revenue from recurring manufacturing revenue. Project work is inherently episodic and must be re-won, so understand what portion of revenue is repeatable production versus one-time engineering that could evaporate.
Verify the ISO 13485:2016 certification status, audit history, and any open FDA or regulatory findings. A lapse, warning letter, or failed audit in this business would impair the core moat and directly threaten customer relationships.
Confirm the leased 11,600 sq ft facility terms and assignability, including remaining term, rent, and renewal options. The cleanroom and production build-out are location-dependent, so an unfavorable or short lease creates real relocation and re-validation risk.
Assess key-person dependency around the owner and regulatory/quality leadership. Understand who holds the customer relationships and the ISO/GMP expertise, and structure the transition and any earnout to retain that knowledge post-close.
Reconcile the EBITDA adjustments to see how 'adjusted' the 23.2% margin really is. Scrutinize add-backs, owner compensation, and any non-recurring items to confirm the sustainable earnings a new owner would actually inherit.

Source

Originally listed on BizBuySell. View original listing →