The company, 80% owned by the founding Naeder family and 20% by buyout fund EQT, has asked banks to pitch for roles in the initial public offering, which could become one of the country's largest deals next year.
Ottobock, which was founded in 1919 as a maker of prosthesis for World War One veterans, has repeatedly said it eventually plans to go public, but has so far not commented on the expected timing of a deal.
"We want to be capital markets ready from 2022. Work towards that milestone is ongoing," said a spokesman for the Duderstadt-based company on Thursday, declining to elaborate.
Ottobock's family owners and EQT declined to comment.
The mandating of banks to prepare for an IPO often takes place at least 3-6 months ahead of any deal, and final timing depends on market conditions that need to be favorable for any transaction to go ahead.
The company makes prosthetics, orthotics, wheelchairs and exoskeletons and in 2019 posted core earnings of 191 million euros on sales of 1 billion euros. Last year, it saw revenues drop as shops remained closed during the COVID-19 pandemic.
Listed peers include Ossur, Hanger Invacare and Ekso Bionics.
According to market research, the global $6 billion prosthesis and orthosis market is expected to grow by about 4% annually as populations age and cases of injuries as well as of diseases like bone cancer rise.
While Ottobock has been considering an IPO for years, EQT's stake purchase in 2017 at a valuation of 3.15 billion euros delayed earlier plans.
Since the buyout group's investment, Ottobock has named former Fresenius manager Philip Schulte-Noelle as Chief Executive.
It has also sold off its plastic foam materials business to Switzerland's Conzzeta and acquired businesses such as V!GO, assets of peer Freedom Innovations and a stake in distributor Cascade Orthopedic Supply.
($1 = 0.8431 euros)
(Reporting by Arno Schuetze; Editing by Kirsten Donovan)
By Arno Schuetze