ResMed Inc. (ASX:RMD) has moved to simplify its business and sharpen its focus on sleep, breathing and connected home healthcare, agreeing to sell its MatrixCare software unit to US private equity firm Frazier Healthcare Partners for US$490 million in cash.
The transaction, which is subject to closing adjustments and regulatory approvals, is expected to complete in the first quarter of FY27.
ResMed shares were trading 0.6% lower at A$31.26 following the announcement.
Sale supports 2030 strategy
ResMed said the divestment aligned with its 2030 strategy to concentrate capital and management attention on “high-growth, scalable opportunities in sleep health, breathing health and connected home-based healthcare”.
MatrixCare generated about US$220 million in revenue and US$55 million in non-GAAP operating profit, according to preliminary results.
The company intends to use net proceeds from the sale to return capital to shareholders, including through an accelerated share repurchase program, as well as for general corporate purposes.
Lower price than 2018 acquisition
The sale price is 35% below the US$750 million ResMed paid for Minnesota-based MatrixCare in November 2018, when it acquired the business from OMERS Private Equity.
MatrixCare provides software for long-term post-acute care, senior living and related healthcare providers.
While the sale comes at a lower headline valuation than the original purchase price, Morgans analyst Derek Jellinek said he viewed the announcement “positively”.
“The disposal simplifies the investment case by increasing exposure to core franchises (sleep devices; masks; residential care software (RCS)) while exiting a somewhat peripheral vertical (aged care),” Jellinek said.
“And while MatrixCare was acquired in 2018 for US$750m, it has created value over the past 8 years (that is, recurring SaaS revenue; cash generation; enabled Brightree integration across the out-of-hospital care ecosystem).”
Jellinek said the divestment appeared to monetise a mature asset while sharpening ResMed’s focus on its core growth drivers and allowing capital to be recycled into higher-return opportunities and shareholder buybacks.