ResMed’s Love Connection Leads to Propeller Health Buyout

ResMed celebrates a strong beginning to 2019 with their buyout of Propeller Health, a $225 million deal that means big things for the company’s lineup of respiratory care products and services. The acquisition was first announced late last month and finally concluded with their statement the deal was formally closed at JPMorgan’s 2019 HealthCare Conference in early January.

ResMed executives first crossed paths with Propeller Health’s people at JPMorgan’s 2018 Healthcare Conference. They knew they had a connection when the conversation turned to potential ways to partner around COPD. Both companies were interested but wanted to explore the possibilities before making a bigger commitment

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It wasn’t until a meeting in the city of Madison that they realized it was love at first growth-strategy sight. “Back when we were dating – before we got married, if you like – Richard McHale, president of our respiratory division, went to Wisconsin to meet with the Propeller team,” ResMed CEO Mick Farrell shared in an interview.

“He presented our growth strategy, and his three horizons of growth within respiratory care – and his third one essentially described Propeller’s business model,” described Farrell. Their plan included partnering with pharmaceutical companies on designing delivery devices for their products.

Then it was Propeller’s turn to ‘you complete me’ and they did so, sharing their own plans to build relationships with medical technology companies and fast-track sales of their digital inhalers. “And it was almost like they looked at each other, with everybody in the room saying, Did you guys plan that?” Farrell said. “No, it was just one of those things.”

ResMed is a California-based company specializing in the sale of respiratory-related medical equipment and out of hospital software-as-a-service (SaaS) business solutions. Their cloud-connected devices help providers diagnose and treat sleep apnea, COPD and other chronic diseases. They also empower patients to take control of their health with apps like myAir that allows 1.5 million people to self-monitor their CPAP treatment.

ResMed employs 6,000 people and has customers in over 120 countries. They have a strong investment in research and development which puts them in a good position to market new advances and innovations ahead of the competition. Investors are also looking favorably on ResMed as multinational investment bank Morgan Stanley decided to increased its stake in the company in 2018 Q3.

This has created a domino effect among other institutional investors and hedge funds with big players like CIBC World Markets, Commonwealth Equity Markets and Prudential Financial Inc. also choosing to boost their own ResMed buy-in.