Coming off the news that it had finalized its purchase of Inova labs, sleep and respiratory technology company ResMed has made an even bigger announcement: ResMed has definitively agreed to buy HME and post acute care software giant Brightree LLC for $800 million.
A statement from ResMed cited Brightree’s cloud-based software that helps HME providers improve clinical and business performance as a key avenue for expanding ResMed’s presence in technology-drive post acute healthcare.
ResMed noted that the HME, home health, and hospice care are all settings that see high prevalence of sleep-disordered breathing, an arena where the company has established its dedication to remote patient monitoring and connected health.
“This acquisition furthers ResMed’s position as the leading tech-driven medical device company and gives our customers new tools to help them increase operational efficiency and improve cash-flow while delivering best-inclass patient care,” ResMed CEO Mick Farrell said in a public statement. “… This acquisition will enable us to add to our portfolio of digital solutions to drive operational excellence and improve outcomes for patients, providers and payors.”
“The Brightree team is very excited to join forces with ResMed to help post-acute care providers navigate the inherent complexities of the healthcare system and ensure that patients get the care they need,” Brightree President and CEO Dave Cormack said.
Once the sale is complete, Brightree will continue to operate as a separate entity under the Brightree brand. Brightree employees, including Cormack, will continue in their current roles. ResMed’s statement said it expects Brightree will be independently managed, and will remain in its Atlanta headquarters.
Global investment firm Battery Ventures has majority-ownership of Brightree. Under the terms of the agreement, ResMed will acquire Brightree for $800 million in cash, which ResMed will fund primarily with debt. Brightree had net sales of approximately $113 million and EBITDA of about $43 million in calendar year 2015.
Live, Archived Merger Webinar & Call
For investors, the transaction is expected to be immediately accretive to gross margins and non-GAAP diluted earnings per share after close and beyond. The transaction includes an estimated $300 million from an anticipated future tax benefit, which is expected to positively impact ResMed cash flows over 15 years. Including the present value of these expected tax benefits, the purchase price of $800 million represents a valuation multiple of 13.5 times 2015 EBITDA.
ResMed will discuss the transaction on a live webcast at 5 p.m. Eastern time today, Feb. 22. The live webcast can be accessed on ResMed’s Investor Relations website at investors.resmed.com.
The online archive of the broadcast will be available on ResMed’s website approximately two hours after the webcast. In addition, a telephone replay of the webcast will be available approximately two hours after the call by dialing (855) 859-2056 (U.S.) and +1 404.537.3406 (international) and entering a passcode of 51915219. The telephone replay will be available until March 7.