ResMed to Acquire MediFox Dan for $1B

Investment Memo: ONE 2022

General: Medtech acquisition

ASX listed health giant ResMed (capped at $42B) will shell out $1B for German health software company MediFox Dan.

MediFox operates on a SaaS model and makes software for providers of out-of-hospital care across a range of business functions.

The significance of this acquisition is that it provides some insight into what multiples companies in the health tech space are willing to pay for growth - which is particularly relevant to our health tech Investment Oneview Healthcare (ASX:ONE).

ResMed’s acquisition of MediFox Dan (which had $83M in revenues last year) will take place at 12x revenue.

We note that in 2021 ONE made €9.7M ($14.7M) from continuing operations of which €5.3M ($8M) was recurring revenue.

Extrapolating roughly from there, a 12x revenue multiple would value ONE at a $177M market cap.

That’s a very large 130% premium to ONE’s current market cap.

While this is just one example, we think it's a good exercise as the broader tech sector gets battered in an inflationary and rate tightening environment.

We think the key takeaway is that tech's not dead as an investment thematic, it's just hibernating. I.e at some point in the sell off, tech stocks should eventually become a decent value proposition once more.

What’s next for ONE: We’re looking for more sales momentum and for ONE to smash through the 15,000 contracted bed marker - a key metric for measuring ONE’s success. ONE recently signed its biggest ever deal for a further 2,441 contracted beds with the BJC HealthCare network.