ResMed Operations Inc. $750 Million Acquisition of MatrixCare Holdings Inc.


Sidley advised OMERS Private Equity, the defined benefit pension plan for Ontario’s municipal employees, in its sale of MatrixCare Holdings Inc.


ResMed (NYSE: RMD) (ASX: RMD) has signed a definitive agreement to acquire privately held MatrixCare, a leader in U.S. long-term post-acute care software, serving more than 15,000 providers across skilled nursing, life plan communities, senior living and private duty.

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.

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 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.

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.

Sidley advised OMERS Private Equity with a team including

partners S. Scott Parel (Picture); Colleen Brown (privacy and cybersecurity); Laura Barzilai (tax); Ben Rosemergy (employee benefits and executive compensation); Liz McCloy (real estate); Heather Palmer (environmental) and counsels Lauren Grau (technology & IP transactions) and Kate Heinzelman (privacy and cybersecurity).

Involved fees earner: Scott Parel – Sidley Austin LLP; Colleen Theresa Brown – Sidley Austin LLP; Kate Heinzelman – Sidley Austin LLP; Laura Barzilai – Sidley Austin LLP; Benjamin Rosemergy – Sidley Austin LLP; Elizabeth McCloy – Sidley Austin LLP; Heather Palmer – Sidley Austin LLP; Lauren Grau – Sidley Austin LLP;

Law Firms: Sidley Austin LLP;

Clients: OMERS Private Equity;

Author: Ambrogio Visconti