HSG’s acquisition of an approximately 80% stake in Chinese precision components maker Peiertech highlights an underexplored opportunity in Asian manufacturing: upstream suppliers for complex medical devices.

“The deal gives HSG a strong platform in a technically demanding, fragmented niche where global private equity has demonstrated the value of consolidation,” said Steve Jia, a partner and head of buyout at HSG.

Jia described the transaction, announced on 8 October, as proprietary but declined to comment on financial details. The remaining stake will be retained by the Jiangyin-based company’s existing management team, which will continue to oversee daily operations.

Founded in 2002, Peiertech specialises in medical-grade nitinol materials, precision components, and assembly services. Nitinol, an alloy of nickel and titanium with shape-memory and super-elastic properties, is used in a range of minimally invasive medical devices, including stents, structural heart devices, and electrophysiology catheters.

Upstream precision medical manufacturing is highly sought after among global private equity firms yet difficult to identify without deep knowhow. Moreover, the segment is fragmented with few scaled platforms in Asia. Regional investment in the broader med-tech space has focused on pharma and finished devices, leaving upstream specialists comparatively underexplored. That’s the gap HSG is targeting.

Private equity and venture capital investment in medical devices, appliances and supplies in Asia increased from USD 2.7bn in 2024 to USD 4.9bn in 2025, according to AVCJ Research. Deal count rose from 114 to 134, although most of these are relatively small venture capital investments.

China remains the largest market, with 89 transactions worth a combined USD 3.2bn in 2025, more than 3x the value recorded a year earlier. While investment activity remains below its 2021 peak in terms of deal count, the rebound indicates sustained investor appetite for the broader medical device sector.

High entry barriers and durable customer relationships are part of the attraction of this space, as is the ability to add complementary technologies and expand a manufacturer’s share of the supply chain through M&A.

Carlyle demonstrated the opportunity in the global market in December 2021, when it acquired a significant stake in Resonetics, valuing the US upstream medical manufacturer at USD 2.25bn. Two years later, Resonetics acquired Memry Corporation and SAES Smart Materials for USD 900m, citing the valuation as equivalent to 17x the target companies’ combined adjusted EBITDA. The acquisitions added capabilities in nitinol materials and downstream manufacturing.

Peiertech’s offering requires accumulated process expertise and long customer qualification cycles. This creates switching costs and durable relationships with global device makers.

The manufacturing and processing requirements of nitinol also represent a significant barrier to entry. Precision, safety, reliability and consistency are critical, and suppliers must often undergo lengthy qualification processes before components can be incorporated into medical devices.

The global nitinol-based medical device market will grow from USD 20.9bn in 2025 to USD 23.1bn in 2026, according to data from Research and Markets. The annual growth rate of 10.6% is supported by increasing adoption of minimally invasive procedures.

HSG sees an opportunity to capture a larger share of global demand by leveraging Peiertech’s technical expertise and established relationships with major medical device manufacturers.

This effort will be informed by HSG’s broader healthcare experience, including existing medical devices investments. The investor’s international network is also hoped to provide access to customers, commercial connections and operational expertise that would be harder for a standalone manufacturer to develop independently.

“The next phase will focus on international expansion, with organic growth the priority and acquisitions a potential tool for building a global business,” Jia said.