ResMed Purchases German Competitor

Apr 1, 2001 12:00 PM, Richard Park

Poway, Calif. -- ResMed has acquired all outstanding shares of Munich, Germany-based MAP Medizin-Technologie, a designer, manufacturer and distributor of medical devices for the diagnosis and treatment of sleep-disordered breathing with a focus on obstructive sleep apnea. The agreement is valued at approximately $69 million, to be paid in cash and through the assumption of debt.

"The MAP management team is to be congratulated for having taken the company to the number one position in Germany in just six years, and we are delighted to partner with them," said Peter Farrell, ResMed chairman and chief executive officer. "This acquisition comes at the right time for us when we are looking at opening up new areas of business in both the diagnosis and treatment of sleep-disordered breathing in patients with chronic obstructive pulmonary disease, congestive heart failure and post stroke."

ResMed executive vice president Christopher Roberts added that the acquisition will bolster the company's European presence.

"Germany is the second-largest SDB market in the world, and MAP is the market leader in Germany with both its diagnostic and treatment devices," he said. "MAP's strengths in [research and development], sales and marketing complement those of ResMed and will strengthen ResMed's market leadership position in Europe. The acquisition of MAP represents a significant step forward in ResMed's global strategy and will assist ResMed's European expansion."

According to MAP CEO Stefan Madaus, "The MAP team is looking forward to working with a successful, truly global company," he said. "We believe that we will now have the resources to make an even stronger contribution with innovative devices for the diagnosis and treatment of sleep-disordered breathing."

The acquisition of MAP is to be paid in two installments: an initial payment of $13.5 million, with the balance of $41 million due in May. Total debt to be assumed is approximately $14.5 million. ResMed expects to fund the acquisition through a combination of debt and cash, officials said.

The transaction, excluding certain costs associated with it, is considered nondilutive during the rest of ResMed's fiscal year ending June 30, officials said. As part of the transaction and as a consequence of MAP's extensive R&D activities, ResMed expects to take a charge for purchased in-progress R&D within its fiscal third quarter.