Tactile Systems this week announced that it has acquired the assets of the AffloVest respiratory therapy business from International Biophysics.
Minneapolis-based Tactile Medical financed the transaction through a combination of cash on hand and $55 million of borrowings under an existing credit facility. The credit facility is provided by Wells Fargo Bank.
AffloVest is a portable, wearable vest that International Biophysics designed to treat patients with chronic respiratory conditions, such as COPD-associated breathing conditions, or conditions resulting from neuromuscular disorders and cystic fibrosis. It manages airway clearance and is battery-powered with high-frequency chest wall oscillation.
“The addition of AffloVest represents an ideal strategic fit for Tactile Medical as it aligns well with our focus of treating patients with underserved chronic conditions in the home,” Tactile Medical president and CEO Dan Reuvers said in a news release. “We expect to promote AffloVest’s patented, portable design, demonstrated clinical outcomes and established reimbursement within the Durable Medical Equipment (DME) channel to drive AffloVest to contribute to our overall company goal of 20%+ revenue growth going forward. Like lymphedema, the chronic pulmonary disease market represents a large, and still underpenetrated opportunity. Importantly, multiple members of our management team have significant experience in this category, which gives us confidence in our ability to execute our commercial strategy for AffloVest. We look forward to welcoming the AffloVest sales team to Tactile Medical and intend to maintain their strategy of partnering with DME companies to promote the proven therapy. The sales representatives at these DME companies are uniquely positioned to provide valuable access to chronic respiratory providers and patients through their complementary product and service offerings such as oxygen, nebulizers and ventilators.”
According to the company, AffloVest has been shown to reduce antibiotic use, emergency room visits and hospitalizations.
“Longer term, we believe adding a mobile, wearable therapy to our portfolio invites synergy within our R&D roadmap as we advance our goals within ease-of-use and digital engagement. We believe this is a compelling transaction as it expands Tactile Medical’s annual addressable market opportunity in the U.S. to more than $10 billion, fits our long-term revenue and margin growth profile, enhances our long-term profitability, and is expected to generate an attractive return on investment,” Reuvers said.
