The medical device sector may be witnessing a resurgence in initial public offerings (IPOs), with two cardiac technology firms potentially leading the charge. Reports suggest that Kestra Medical Technologies and Heartflow, both innovators in non-invasive heart condition diagnostics, have engaged financial advisors to prepare for their stock market debuts. This move could signal an end to a period of reduced activity in medical tech listings, which has lasted nearly three years. During this time, only four medical device manufacturers went public in the United States.

Interest in medical device companies had waned due to high interest rates and underwhelming performances from firms that debuted during the pandemic. However, recent developments indicate a shift in investor sentiment. For instance, Heartflow, known for its coronary artery disease diagnostic tool, previously abandoned a SPAC listing in 2022 that would have valued it at $2.8 billion. Meanwhile, Kestra, which specializes in wearable monitoring and defibrillation devices for ventricular arrhythmia patients, secured a significant funding round last year. These events, coupled with broader market optimism, suggest that the tide may be turning for private equity-backed companies looking to go public.

The renewed confidence extends beyond just the medical device sector. Investment bankers anticipate an uptick in equity capital markets activity this year, driven by improved economic conditions. Companies like Medline, Venture Global, and Sailpoint are also preparing for potential IPOs. As private equity firms look to capitalize on more favorable market conditions, they are becoming increasingly proactive in exploring exit strategies for their portfolio companies. This proactive approach reflects a growing belief that now is the time to seize opportunities in a revitalized market environment.