Medical device maker ResMed has agreed to acquire Minnesota-based MatrixCare, which makes software for long-term care providers, for $750 million.
San Diego’s ResMed (NYSE: RMD) announced its intention to buy the privately held tech company on Monday. The purchase price is 25 times MatrixCare’s pro forma 2018 earnings of about $30 million (without taking into account interest, taxes, depreciation or amortization) on anticipated net revenue of about $122 million.
ResMed, which brought in net income of $315.6 million on revenues of $2.3 billion in its most recent fiscal year, is best known for making continuous positive airway pressure (CPAP) machines that help people manage sleep apnea, chronic obstructive pulmonary disease, and other respiratory conditions. But it also offers software for the home medical equipment, home health, and hospice industries thanks to previous acquisitions, including its purchase of Atlanta, GA-based Brightree for $800 million in cash and debt in 2016 and of HEALTHCAREfirst earlier this year for an undisclosed amount.
ResMed says it will make “no immediate changes to management, locations, or business processes,” and that MatrixCare will operate as a standalone business within its software portfolio. MatrixCare CEO John Damgaard will report to Raj Sodhi, president of ResMed’s software-as-a-service business.
About 13,000 nursing homes and similar facilities and 2,500 home care, home health, and hospice organizations use MatrixCare software, according to the company.
The deal is anticipated to close by year’s end, and to be immediately accretive to earnings. ResMed, which intends to primarily use its credit facility to fund the deal, said it plans to pause its share repurchase program once the transaction closes.
Founded in 1989, ResMed has about 6,000 employees across 120 countries.