Did You See ResMed’s (ASX:RMD) Latest Takeover?


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This week ResMed Inc. (ASX: RMD) announced it will be acquiring MatrixCare for US$750 million.

ResMed is one of the world’s largest businesses focused on treating sleep-related breathing disorders such as sleep apnea.

The MatrixCare US$750 million acquisition

MatrixCare is US-based long-term post-acute care software business. It serves more than 15,000 providers in skilled nursing, life plan communities, senior living and private duty.

The MatrixCare software has a number of uses including point of care, lead and referral management, claims processing, payroll and nutritional management, as well as other users.

MatrixCare’s estimated revenue for 2018 is US$122 million, with EBITDA of around $30 million (click here to learn what EBITDA means). ResMed management expect it to increase its gross margin and profit per share (EPS) as soon as the deal is complete.

ResMed will fund the US$750 million acquisition mostly with debt and it’s expected to be completed by ResMed’s 2019 half year result, which should mean by the end of December 2018.

Mick Farrell, CEO of ResMed, believes this is a step towards achieving a market-leading position. He said, “ResMed is the world’s leading tech-driven medical device company and is well positioned to be the leading out-of-hospital software provider in the market.”

ResMed now owns a number of software services including Brightree, HEALTHCAREfirst and — soon –MatrixCare. The company recently reported its net profit grew by 23% in the first quarter of its 2019 financial year.

The ResMed share price is up 13.7% over the past six months according to Google Finance.

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Jaz Harrison

Jaz Harrison

Jaz is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.