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ResMed spins deal for Propeller
Posted on Wednesday, 05 December 2018 10:49
ResMed, a manufacturer of cloud-connected devices, has reached an agreement to acquire US-based digital therapeutics company Propeller Health for USD 225.00 million.

The buyer, which has a current market capitalisation of USD 15.98 billion, plans to fund the payment through its credit facility and is expecting a dilutive impact on its quarterly non-generally accepted accounting principal earnings per share in the range of USD 0.01 to USD 0.02 in fiscal 2019.

Propeller’s main product connects health services to people living with chronic obstructive pulmonary disease (COPD), a group progressive lung viruses including emphysema, chronic bronchitis, and non-reversible asthma.

Its digital medicine platform consists of small sensors that easily attach to inhalers and pair with a mobile application to track medication use and provide personal feedback and insights.

For ResMed, the move comes less than a month after it agreed to acquire long-term post-acute care group MatrixCare for USD 750.00 million in cash.

The acquisition of Propeller is expected to complete in the purchaser’s third quarter ending 30th March 2019 and is subject to regulatory approvals.

Mick Farrell, chief executive of ResMed, said: “By working with Propeller’s existing partners to offer digital solutions for respiratory care pharmaceuticals and building on our proven ability to support digital solutions at scale, we can positively impact the lives of even more of the 380.00 million people worldwide who are living with this debilitating chronic disease.”

The target counts Safeguard Scientifics as one of its shareholders.

In a separate statement, the investor said it expects to receive USD 41.40 million from the proceeds of this deal.

Shares in ResMed declined slightly to USD 112.13 yesterday; however, stock prices are still up 31.1 per cent since the start of the year (2nd January 2018: USD 85.53).

According to Zephyr, the M&A database published by Bureau van Dijk, there have been 766 deals targeting medical equipment and supplies manufacturers announced worldwide in 2018 so far.

The top four deals each featured US-based businesses, the largest of which was Fortive’s USD 2.80 billion acquisition of Advanced Sterilisation Products Services.

Platinum Equity paid USD 2.10 billion to pick up LifeScan, Zoetis purchased Abaxis for USD 2.00 billion, while Stryker agreed to buy K2M Group Holdings for USD 1.40 billion.

© Zephus Ltd