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Highlights
- Acquisition of Orb Health: Respiri has successfully acquired Orb Health Inc. for US$9 million in shares, marking a significant milestone in its expansion into the U.S. connected and chronic care health market.
- Additional investment from Orb Health: As part of the deal, Orb Health will invest US$0.7 million into Respiri through the subscription of additional shares.
- Corporate restructuring: Respiri is integrating Orb Health's operations, resulting in cost savings and expanded service offerings.
Respiri Limited (ASX:RSH) has announced the successful acquisition of Orb Health Inc. through an asset purchase agreement, valued at US$9 million. The acquisition was settled through the issue of 160,998,504 fully paid ordinary shares (Initial Consideration Shares), marking a major step forward for Respiri in its drive to dominate the connected and chronic care health market in the United States.
Strategic Acquisition and Financial Details
The acquisition is structured to include an additional investment by Orb Health, amounting to US$0.7 million (~A$1.1 million). Orb Health will subscribe to additional shares, with the first tranche of 7,155,489 shares (valued at US$0.4 million) issued simultaneously with the initial shares. The second tranche of 5,366,617 shares (valued at US$0.3 million) is expected to be completed within the next 45 days.
Furthermore, there is a provision for additional payments upon Orb Health meeting financial targets at the end of calendar year 2025, also to be settled in shares.
Operational Synergies and Cost Savings
Respiri is already making strides in integrating Orb Health into its corporate structure. This integration has led to significant operational cost savings, and the company is optimistic about optimizing its headcount, systems, and corporate structure. Additionally, the merger has expanded Respiri’s service offerings, and these have been well received by existing clients. The company is confident that the increased service capabilities will translate into additional contract services in the near future.
Leadership Changes and Future Plans
As part of the restructuring, Mr. Nicholas Smedley, previously Executive Chairman, will transition to the role of Non-executive Chairman. This change is part of Respiri’s broader strategic shift. In line with the new role, Mr. Smedley has agreed to a reduction in his Chairman's remuneration from $240,000 per annum to $75,000 per annum. Despite the change in role, Mr. Smedley will continue to play a key strategic role in Respiri’s U.S. market expansion and in representing the company to major stakeholders.
Market Response
In response to the announcement, Respiri’s share price has risen 2.74%, reaching 7.5 cents per share as of 21 January 2025.
