ResMed sells MatrixCare for US$490 million

About ResMed

ResMed Inc. (ASX: RMD) is a leading global health technology company focused on sleep, breathing and care delivered in the home, with operations spanning 140 countries and a product portfolio that includes AI-powered digital health solutions, cloud-connected devices and intelligent software. Headquartered in San Diego, California, ResMed is best known in Australia as the maker of CPAP and other sleep apnoea treatment devices, and has grown into a broader connected care platform serving millions of patients globally. The company’s software businesses serve the post-acute care sector, with Brightree in the United States and MEDIFOX DAN in Germany retained following the MatrixCare divestiture. ResMed will provide its full fiscal year 2027 outlook during its fourth quarter fiscal year 2026 earnings call on 6 August 2026.

The transaction

ResMed entered into a definitive agreement on 30 June 2026 to sell the MatrixCare business to Frazier Healthcare Partners, a Seattle-based private equity firm focused exclusively on the healthcare industry that has raised over $11 billion in capital and invested in more than 200 companies over 35 years. The $490 million all-cash transaction covers MatrixCare and related software offerings historically sold under the MatrixCare brand, including Healthcare First, Citus and home health and hospice solutions. The sale excludes ResMed’s other software businesses, Brightree in the United States and MEDIFOX DAN in Germany, which are retained within the group.

Until closing, MatrixCare will continue to operate as part of ResMed with no changes to customer service or support. ResMed and Frazier Healthcare Partners expect to enter into transition services agreements to facilitate continuity across systems, processes and day-to-day operations, with these arrangements expected to largely offset stranded costs in the first year following completion. ResMed intends to mitigate and eliminate any remaining stranded costs over time.

Strategic significance

The divestiture of MatrixCare is a deliberate portfolio simplification that aligns ResMed’s capital and resources with what management regards as its highest-conviction growth opportunities. MatrixCare provides software solutions to more than 15,000 providers supporting skilled nursing, senior living and long-term care, life planning communities and home health and hospice care. While a meaningful business in its own right, it operates in a market that sits outside ResMed’s core competency in sleep health and connected home-based care, and the sale allows the company to reallocate capital toward innovation and operational scale in those higher-growth segments.

The transaction reflects ResMed’s 2030 strategy, which centres on scalable opportunities in sleep health, breathing health and the connected home-based healthcare ecosystem. The company’s AI-powered platform and cloud-connected device portfolio are well positioned to benefit from secular growth in sleep disorder diagnosis and treatment, a market where awareness and uptake have been accelerating globally. The proceeds from the MatrixCare sale will be directed toward shareholder returns, including an accelerated share repurchase program, further signalling management’s confidence in the underlying business and its capital position.

Financial outlook

ResMed reiterated its full year fiscal year 2026 outlook for non-GAAP gross margin, non-GAAP selling, general and administrative expenses as a percentage of revenue, research and development as a percentage of revenue and non-GAAP tax rate, consistent with guidance provided at the third quarter fiscal year 2026 earnings call on 30 April 2026. The company also reiterated its fourth quarter fiscal year 2026 outlook for net interest income and planned share repurchases.

Looking into fiscal year 2027, ResMed continues to expect its Residential Care Software segment, which includes Brightree and MEDIFOX DAN, to accelerate to high single digit percentage year-on-year revenue growth along with operating leverage. The recently completed Noctrix acquisition, which expands ResMed’s presence in neuromuscular and respiratory care, is expected to contribute approximately $30 million of revenue in fiscal year 2027 while reducing non-GAAP diluted earnings per share by approximately $0.20 as integration costs are absorbed. Full fiscal year 2027 guidance will be provided at the fourth quarter fiscal year 2026 earnings call on 6 August 2026.

Conclusion

The MatrixCare sale marks a significant step in ResMed’s portfolio evolution, converting a substantial non-core software asset into $490 million of cash that can be redeployed toward share buybacks and growth investment in the company’s core sleep and connected care markets. With MatrixCare generating approximately $220 million in revenue and $55 million in non-GAAP operating profit in fiscal year 2026, the transaction values the business at approximately 8.9 times non-GAAP operating profit, a reasonable outcome for a business that was unlikely to achieve the same valuation multiple as ResMed’s core device and platform operations. The company enters fiscal year 2027 as a simpler, more focused business, and the market will look to the 6 August earnings call for confirmation that the underlying sleep health and connected care growth trajectory remains firmly intact.