Irvine, Calif.-based Breathe Technologies developed the Life2000 ventilation system, a wearable, non-invasive mechanical ventilation device for patients with chronic obstructive pulmonary disease, interstitial lung disease, restrictive thoracic disorder and post-lung-transplant rehab.
“The acquisition of a highly differentiated, wearable non-invasive ventilation technology provides an exciting growth platform that utilizes our direct Respiratory Care commercial channel and business model,” Hillrom president & CEO John Groetelaars said in prepared remarks. “This transaction represents another example of our plan to strategically deploy capital with a disciplined approach toward higher-growth and higher-margin businesses by expanding into the disruptive new category of non-invasive ventilation.”
Hillrom said the deal, which is slated to close during its fiscal fourth quarter ending Sept. 30, is expected to be “modestly dilutive” in the first year and “increasingly accretive” after that.
“In addition, Hillrom anticipates the acquisition will allow the company to benefit from at least $30 million of net operating losses,” the Chicago-based company said.
Fiscal Q3 results beat the consensus, sales outlook raised
Hillrom reported profits of $32.6 million, or 48¢ per share, on sales of $726.8 million for the three months ended June 30, for a bottom-line slide of -27.9% on sales growth of 2.6%. Adjusted to exclude one-time items, earnings per share were $1.23, a penny ahead of The Street, where analysts were looking for sales of $718.2 million.
“Our third quarter financial results reflect our team’s successful execution of our strategic priorities with strong core revenue growth and earnings that exceeded expectations,” Groetelaars said. “Today we are raising our full-year core revenue growth expectation and reaffirming our adjusted EPS guidance range. Strong operational performance is expected to fully offset select investments and dilution related to the pending acquisition of Breathe Technologies and the recent divestiture of surgical consumables.”
Hillrom said it expects to log adjusted EPS of $5.03 to $5.05 on sales growth of about 2% for fiscal 2019. Fiscal fourth-quarter adjusted EPS are pegged at $1.64 to $1.66 on flat sales growth.