ResMed, which makes medical equipment and home health management software, said it will acquire MatrixCare in a deal valued at $750 million.
MatrixCare, which provides acute long-term healthcare software, will broaden RedMed's software-as-a-service portfolio. ResMed appears to be creating an integrated stack of hardware and software for out-of-hospital care.
The acquisition of MatrixCare will also diversify ResMed's revenue base. In the first quarter, ResMed said 8 percent of its revenue was attributed to software as a service with 55 percent of sales from devices to 37 percent to masks and accessories.
RedMed's software portfolio now includes Brightree, Healthcarefirst and MatrixCare and covers home medical equipment, home health and hospice. ResMed is best known for its sleep apnea home systems. The company noted on its first quarter earnings conference call that it would aim to expand its software portfolio via acquisitions.
Privately held MatrixCare serves 15,000 providers and is based in Minnesota. MatrixCare's software includes electronic health records, leads and referrals, claims processing and payroll.
The plan for ResMed is to integrate its ecosystem to include single patient records across settings and then layer analytics on top of it. ResMed has also sleep care joint ventures with Sleepscore Labs and Verily.
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In addition, ResMed has made a series of software acquisitions dating back to 2012.
MatrixCare's 2018 net revenue is expected to be about $122 million with EBITDA of $30 million. RedMed said the acquisition will be accretive to non-GAAP earnings.
ResMed said it will operate MatrixCare as a standalone business. MatrixCare CEO John Damgaard will remain and report to Raj Sodhi, president of ResMed's SaaS business.
On Oct. 25, ResMed reported fiscal first quarter earnings of 73 cents a share on revenue of $588.3 million, up 13 percent from a year ago.