Medical device maker ResMed has agreed to buy health information technology group Brightree for $US800 million ($1.11 billion).
The deal underscores ResMed's push to integrate data and cloud software technology with its devices to improve management of chronic illnesses like chronic obstructive pulmonary disease (COPD).
"We are the global leaders in respiratory medicine to treat sleep apnoea and COPD," ResMed chief executive Mick Farrell said.
"We have in the last three months put a chip into every sleep apnoea device that we sell and we are now taking more data to the cloud."
Mr Farrell said that the company now has over one million devices taking respiratory data and the deal "leap frogs" ResMed into world leadership in healthcare infomatics, or "connected care".
He said that the monitoring of patients in the home not only delivers quality of life for patients but removes the cost burden on hospitals.
Approximately 19 per cent of United States gross domestic product is spent on healthcare and three-quarter of that is spent on chronic conditions, Mr Farrell said.
The $US800 million price tag is a sizeable bite for the $US8 billion ResMed.
The price represents a multiple of 13.5 times earnings before interest, tax, depreciation and amortisation.
It is expected to be immediately accretive to gross margin and non-dilutive to earnings per share.
Brightree generated $US113 million in sales and EBITDA of $US43 million in 2014-15.
"You don't do acquisitions like this everyday and we will be working very closely to make sure we are maximising value," Mr Farrell said.
Last year the company made headlines after a clinical trial showed that one of its sleep therapies actually increased patient risk of dying for those who suffer both heart failure and central sleep apnoea.
Source : smh.com.au