- Hill-Rom is buying a non-invasive respiratory device maker for $130 million, the medical equipment and systems company announced in conjunction with its third quarter earnings report Friday.
- Irvine, California-based Breathe Technologies markets the 510(k)-cleared Life2000 ventilation system, which can be used in critical care settings or at home for individuals with COPD, interstitial lung disease, restrictive thoracic disorder, as well as in patients rehabilitating after lung transplant. The company currently has about $10 million in annual revenues, Hill-Rom said.
- Breathe's technologies joins Hill-Rom's respiratory care business, housed in its Front Line Care division, which grew 2% last quarter, driven by new products in respiratory care and vision, executives said.
CFO Barbara Bodem told investors on the third quarter earnings call that 2019 investments have been focused on the Chinese market, digital offerings and M&A.
Hill-Rom has undertaken a few acquisitions and sell-offs this year, similar to the size of the Breathe deal. It gained a mobile communications platform through its $180 million purchase of Voalte and divested its surgical consumables business to a private equity group for $170 million.
CEO John Groetelaars told investors Hill-Rom is likely to complete its divestment of non-core businesses by the end of 2020. The company has the capacity for tuck-in acquisitions or bigger deals and looks "to continue this strategy going forward," he said.
The Breathe acquisition isn't expected to have a material impact on core revenue growth in 2019, but will likely add 50 to 100 basis points of growth next year. Respiratory care is the highest-margin business in the company, executives said.
The Patient Support Systems division was up 6% during the quarter, and management said the growth was supported by incorporation of the Voalte technologies. Surgical Solutions' revenues declined 2% as reported and were flat on a constant currency basis but gains from Hill-Rom's surgical tables integrated with Intuitive Surgical's da Vinci Xi system helped.
Hill-Rom's third quarter revenues of $727 million were about $10 million ahead of analysts' expectations. The company expects 2% revenue growth for the full year. Shares in Hill-Rom were down slightly in early trading Friday.