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Digital health-tech business ResMed (ASX: RMD) has announced it is set to acquire German-based software provider Medifox Dan for $1.45 billion (950 million euros) as it looks to become one of the global leaders in out-of-hospital software solutions.
The proposed deal builds on the Australian-founded company’s existing German business as a leading provider of innovative cloud-connected medical devices that transform care for patients with sleep apnoea and other respiratory conditions.
Established in Sydney in 1989 by founder and current chairman Peter Farrell, the acquisition will facilitate the use of the joint-listed ResMed (NYSE: RMD) service-as-a-solution (SaaS) business segment in Germany by integrating with Medifox Dan’s solutions portfolio.
“With the acquisition of Medifox Dan, a fast-growing and innovative German healthcare software leader, we will expand ResMed’s SaaS business portfolio outside our current base in the U.S. market and strengthen our position as the global leader in healthcare software solutions for lower-cost and lower-acuity care,” ResMed CEO Mick Farrell said.
“We are excited to welcome the Medifox Dan team to our global ResMed family: our management cultures are highly aligned with a laser focus on lowering costs, improving outcomes, and changing the course of chronic disease management. Medifox Dan has a strong track record of innovation, fully aligned with our teams at Brightree, MatrixCare, and beyond.
“Medifox Dan’s customer-centricity has built strong and ongoing, growing demand for its software solutions across Germany, and we expect that momentum to continue and strengthen as we become one global team. Our Medifox Dan and ResMed teams are united with the same global mission: to help many hundreds of millions of people live healthier lives outside the hospital, and preferably in their own home.”
The transaction with the current Medifox Dan owner, London-based software and services investor firm Hg, is expected to be finalised in December 2022.
“I’m excited about this landmark union between ResMed and Medifox Dan and the tremendous opportunities it unlocks for thousands of providers and millions of patients,” ResMed SaaS president Bobby Ghoshal said.
“We’re seeing greater adoption of digital solutions across Germany as its population continues to age and severe staffing shortages continue to challenge German care providers. Medifox Dan – and ResMed – are well-positioned to help providers across major out-of-hospital care settings meet rising demands and ultimately help improve patient outcomes.”
Founded in 1994, Medifox Dan sees itself as a pioneer of digitisation in the care industry, selling software to the healthcare sector and building up a large customer base of more than 7,000 care facilities over 25 years.
During the 2021 calendar year, Medifox Dan’s pro forma net revenue was approximately $120 million, with a pro forma adjusted EBITDA of roughly $50 million.
ResMed intends to retain Medifox Dan’s employees, management structure, locations, and business processes, including co-managing directors Dr Thorsten Schliebe and Christian Städtler – who will now report directly to Ghoshal.
“Medifox Dan helps people to help people. We believe that the partnership with ResMed is a unique opportunity to fulfil this promise through the strategic perspectives of an international player on an even larger scale in the future,” Schliebe and Städtler confirmed.
“From now on, we are part of a global company that specialises in the digitisation of the healthcare system. A major benefit of this deal is the wide range of possibilities for an incredibly agile combination of a wide variety of services, from which our customers will particularly benefit in their everyday care work.
“We look forward to taking this next development step together and continue to support our customers in their daily work with innovative software solutions and services in the best possible way.”
Shares in ResMed (ASX: RMD) dropped 1.65 per cent today as of 12.55 pm AEST on the back of the announcement.
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