We assessed both the medical devices (Medtech) and pharmaceutical (Pharma) distribution markets as part of the overall healthcare distribution market, which is collectively expected to grow at a combined CAGR of 7% from US$18bn in 2023 to US$26bn in 2029.

While historically underinvested, the healthcare industry in Southeast Asia (SEA) is becoming a key focal point for public and private investment, driven by growing demand from an increasingly aging population. Healthcare distributors in SEA have been entering the spotlight in recent years, driven by:

• Distributors moving up the value chain, offering a breadth of services to global manufacturers including handling regulatory & compliance affairs, commercialization / demand generation, managing public tenders, logistics, technical support / training, financial management, and after-sales services
• Competitive moats built via (i) understanding of local markets, regulatory environment, and customers, (ii) commercialization and logistical capabilities which translate to economies of scale, and (iii) entrenched supplier and customer relationships supported by their installed base of equipment
• The fragmented nature of SEA, which results in many manufacturers lacking scale to build a local commercial presence in each market, vis-à-vis large homogenous markets such as China and India

Investors are turning their attention to healthcare distribution in SEA, leveraging M&A as a means to diversify geographical or end market exposures, as well as to consolidate the highly fragmented regional market. Many financial sponsors have recognized the huge market potential, building regional healthcare distribution platforms via buy-and-build strategies to achieve scale in SEA.

The distribution sector is resilient, trading at long-term median levels. The sector in SEA is significantly insulated from the impact of trade wars, due to steady demand for health products, and diversified manufacturing source locations. 

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About BDA Partners

BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with 30 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul, and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services, Sustainability and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes.

BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese Government-owned bank with US$150bn of assets. bdapartners.com