ResMed (RMD), the world’s leading tech-driven medical device company and innovator in sleep-disordered breathing and respiratory care, today announced a definitive agreement to acquire privately held Brightree®, a leader in business management and clinical software applications for the post-acute care industry. This acquisition adds to ResMed’s global leadership in connected healthcare solutions.
Brightree’s cloud-based software helps customers improve clinical and business performance in the post-acute care industries of home/durable medical equipment (HME/DME), home health, and hospice – all areas with high prevalence of sleep-disordered breathing, chronic obstructive pulmonary disease (COPD), neuromuscular disease, and other chronic diseases.
This acquisition furthers ResMed’s position as the leading tech-driven medical device company and gives our customers new tools to help them increase operational efficiency and improve cash-flow while delivering best-in-class patient care, said Mick Farrell, CEO of ResMed. “ResMed is already the recognized global leader in remote patient monitoring and connected healthcare solutions. This acquisition will enable us to add to our portfolio of digital solutions to drive operational excellence and improve outcomes for patients, providers and payers.”
The Brightree team is very excited to join forces with ResMed to help post-acute care providers navigate the inherent complexities of the healthcare system and ensure that patients get the care they need, said Dave Cormack, president and CEO of Brightree. Brightree is majority-owned by Battery Ventures, a global investment firm.
Under the terms of the agreement, ResMed will acquire Brightree for $800 million in cash, which ResMed will fund primarily with debt. Brightree had net sales of approximately $113 million and EBITDA of about $43 million in calendar year 2015.
The transaction is expected to be immediately accretive to gross margins and non-GAAP diluted earnings per share after close and beyond. The transaction includes an estimated $300 million from an anticipated future tax benefit, which is expected to positively impact ResMed cash flows over 15 years. Including the present value of these expected tax benefits, the purchase price of $800 million represents a valuation multiple of 13.5 times 2015 EBITDA.
The transaction is expected to close by the end of the fourth quarter of fiscal year 2016, subject to customary closing conditions and regulatory approvals.
Ed. Note: Brightree was originally founded by Steve Elrod , a highly successful independent HME owner. Steve’s company, OxyPlus, grew from a small two person family operation to a sizeable multi-city business…thus, the idea for Brightree was born. Steve and his team set out on a mission to create a company that would provide a complete application solution to address the specific needs of independent HME owners. Paragon Ventures was the exclusive advisor to OxyPlus when the company was sold to a national provider and what became the genesis of Brightreee.