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ResMed closes $225M acquisition of digital therapeutics company Propeller Health

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ResMed closes $225M acquisition of digital therapeutics company Propeller Health

ResMed Inc. has completed its $225 million acquisition of digital therapeutics company Propeller Health.

Propeller Health, a partner company of Safeguard Scientifics Inc., provides connected health solutions for people living with chronic obstructive pulmonary disease and asthma. The company has offices in Madison, Wisc., and San Francisco.

Radnor, Pa.-based Safeguard Scientifics provides capital and relevant expertise to fuel the growth of technology-driven businesses in healthcare, financial services and digital media.

According to a Jan. 7 news release, Safeguard has deployed $14.3 million in Propeller Health since August 2014 and had a 20% primary ownership position. It will receive total cash proceeds of $41.4 million, which excludes an amount of additional proceeds to be held in escrow, representing an approximate 3x cash-on-cash return and 34% internal rate of return.

Propeller Health will operate within ResMed's respiratory care portfolio but will continue to be a stand-alone business, with Propeller CEO David Van Sickle remaining in his current role.

San Diego-based ResMed said the addition of Propeller Health's business is expected to have a dilutive impact on its non-GAAP EPS in the range of 1 cent to 2 cents per quarter during the rest of the fiscal year 2019.

DLA Piper served as the legal counsel for ResMed, while Fenwick & West LLP acted as legal counsel for Propeller Health. Allen & Co. LLC acted as the exclusive financial adviser to Propeller Health for the deal.