SAN DIEGO (November 5, 2018)—ResMed announced it has signed a definitive agreement to acquire privately-held MatrixCare, a provider of long-term post-acute care software, serving more than 15,000 providers across skilled nursing, life plan communities, senior living and private duty.
These care settings are complementary to ResMed’s current software-as-a-service (SaaS) offerings in home medical equipment, home health and hospice, delivered through Brightree and HEALTHCAREfirst, according to the company.
Named “Best in KLAS” for long-term post-acute care software in 2017 and 2018, Minnesota-based MatrixCare’s electronic health record (EHR) solution supports a wide range of long-term care settings, enabling providers to increase patient management efficiencies and deliver superior clinical care. Its offerings include point of care, lead and referral management, claims processing, payroll and nutrition management, among others.
“The acquisition of MatrixCare is an excellent addition to the out-of-hospital software portfolio that we can offer our health care provider customers,” said ResMed CEO Mick Farrell via press release. “ResMed is a tech-driven medical device company and is well-positioned to be a leading out-of-hospital software provider in the market. With our portfolio including Brightree, HEALTHCAREfirst and MatrixCare, we will streamline transitions of care, creating better outcomes for patients, caregivers and out-of-hospital health care providers.”
“By establishing a technology footprint across these major care settings, ResMed will drive an integrated ecosystem of solutions, such as maintaining single-patient records across multiple care settings, generating analytics and insights that can be applied to individuals and whole populations, and streamlining processes for healthcare providers across the care continuum,” said ResMed SaaS President Raj Sodhi in the statement from ResMed.
“Out-of-hospital care today is incredibly fragmented, with individuals struggling to navigate across care settings, and providers often unable to assist," added MatrixCare CEO John Damgaard. "Like MatrixCare, ResMed’s software solutions smooth the path to faster, better care and a smarter way for clinicians to do business."
Under the agreement terms, ResMed will acquire MatrixCare for $750 million, which ResMed will fund primarily with its credit facility. In calendar year 2018, MatrixCare pro forma net revenue is estimated to be approximately $122 million, with a pro forma EBITDA of approximately $30 million, according to the statement from ResMed. The transaction is expected to be immediately accretive to non-GAAP gross margin and non-GAAP diluted earnings per share after close and beyond. The purchase price of $750 million represents a valuation multiple of 25 times the expected calendar year 2018 pro forma EBITDA of $30 million.
The ResMed MatrixCare transaction is expected to close by the end of the second quarter of ResMed’s fiscal year 2019, subject to customary closing conditions and any applicable regulatory approvals. Following completion of the transaction, ResMed intends to suspend its share repurchase program, according to ResMed.
On completion of the transaction, MatrixCare will continue to operate as a standalone business within ResMed’s SaaS portfolio, with targeted commercial, technical and operating links to ResMed and Brightree. There will be no immediate changes to management, locations or business processes. MatrixCare CEO John Damgaard will continue in his current role, reporting to Raj Sodhi.
Visit resmed.com and matrixcare.com for more information.