ResMed acquires CareTouch
About the author:
- Author name:
- By Dr Derek Jellinek
- Job title:
- Senior Analyst
- Date posted:
- 09 July 2015, 9:21 AM
- Sectors Covered:
- Healthcare
ResMed (RMD) has acquired CareTouch, a US-based provider of internet solutions and therapy-focused resupply programs for home medical equipment providers (HMEs).
Founded in 2003, CareTouch provides HMEs an easy-to-use solution for managing and monitoring patient populations, with customised patient engagement protocols and automated interactive voice response as well as live multi-lingual call centre outreach.
The company has connected with more than eight million patients on behalf of its HME customers.
CareTouch will be rebranded to ResMed ReSupply.
Deal terms were not disclosed.
Our view
While the undisclosed nature of this transaction indicates the financial metrics are not material and so we wouldn't expect this acquisition to drive a meaningful contribution to earnings (at least over the near term), the acquisition does look to enhance RMD's healthcare informatics offering by streamlining resupply communications between HMEs and patients.
Enhanced connectivity between HMEs and their patients should help RMD maintain its market share by driving preference for RMD masks and enable gradual growth in resupply over time.
Impact to forecasts and view
None
Recommendation
In the face of continued market turmoil, the resilience of this name has been clearly evident over the past several trading seasons. We remain confident the stock can continue to outperform as it offers a solid future earnings profile given:
- it remains early days in a new product roll-out cycle
- growth restoration in the mask category is likely as prior ASP declines are annualised and new products are launched
- GMs should stabilise/improve on the back of AUD weakness, optimisation of product mix and as cost-out programs are undertaken
- the global pricing and regulatory environment remain stable
- the company continues to take market share.
More information
Morgans clients can access our detailed research on ResMed. If you are interested in finding out more, please contact your nearest Morgans office.
Disclaimer(s): The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents ("Morgans") do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.
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