ResMed Slips After Acquisition Update

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ResMed Inc (ASX:RMD) has issued a press release on November 6, 2018, announcing its entry into an agreement and plan of merger of ResMed operations Inc, a Delaware corporation and a wholly owned subsidiary of ResMed Operations MatrixCare Holdings, Inc., a Delaware corporation (“MatrixCare”), and OPE LGI Holdings Limited, a Canadian private company, in its capacity as the agent acting on behalf of the holders of common stock of MatrixCare, providing for the merger of Merger Sub with and into MatrixCare. Under this merger agreement MatrixCare will become the surviving company and a wholly owned subsidiary of ResMed operations.

ResMed is the leading connected healthcare company having more than 6 million cloud-connected devices for daily remote patient monitoring, and has signed a definitive agreement to acquire privately held entity MatrixCare, industry leader in U.S post –acute care software, that serves more than 15000 providers spread across skilled nursing, life plan communities, private duty and senior living. These settings are complementary to the current software (SaaS) of ResMed which offers in home medical equipment’s, home health. 

MatrixCare electronic health record solution supports various long-term care settings, thereby helping providers to increase patient management efficiencies and deliver superior clinical care. The wide range of services include point of care, lead and referral management, payroll and nutrition management and claims processing.

The recent acquisition of MatrixCare is an addition to the out –of –hospital software portfolio of ResMed, which will be offered to the healthcare provider customers.

ResMed being the leading tech driven medical device company and the leading out –of hospital software provider in the market will have wide portfolio base with this acquisition. The current portfolio of ResMed includes Brightree, HEALTHCAREfirst. With the addition of MatrixCare to the already existing portfolio the company will streamline transitions of care, providing better outcomes for patients, and out of hospital healthcare providers.

Under this merger agreement, ResMed will acquire MatrixCare for $750 million. The amount will be funded primarily with its credit facility.

MatrixCare’s proforma revenue was estimated to be approximately $122 million in CY2018, and proforma EBITDA of approximately $30 million was reported in CY2018. The transaction is expected to get completed by the end of the second quarter of FY2019, subjective to customary closing conditions and mandatory regulatory approvals. After the completion of the transaction, ResMed will suspend its share repurchase program and MatrixCare will continue its operation as a standalone business within ResMed’s SaaS portfolio.

ResMed will have its technological footprints wide spread across major care settings with this acquisition and will be able to set up an integrated ecosystem of solutions such as maintaining single-patient records across multiple care settings, generating analytics and insights that can be implied to individuals and whole populations and making the process streamlined for healthcare providers across the care space.

The merger agreement will help ResMed software solutions to provide faster, better care and smarter way for clinicians to do business after making the day high of $14.68 and day low of $14.42 is currently trading at $14.54.

RMD edged lower and closed at $ 14.540, as at November 06, 2018.


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