Senzime has signed an agreement to acquire 100 percent of the shares in the US company Respiratory Motion, Inc. for an initial consideration of 19 million USD on a cash- and debt-free basis with an additional potential earn-out payment of up to 25 million USD, paid out earliest in 2024.
The sellers consist of a larger group of individuals and companies, some of whom are employees of the company and others are professional investors.
“The next building block in our journey”
Through the acquisition, Senzime expands its product portfolio within the market for monitoring of vital signs and extends the company’s capability to capture a larger share of the patient journey outside of the operating room as well, it states. The acquisition also aims to accelerate the market penetration of the TetraGraph system with evident sales and margin synergies. The transaction contributes to Senzime’s overall mission of becoming a global market leader in patient monitoring of vital signs with a vision to eliminate complications related to anesthesia and analgesia, the company states.
”This is an acquisition with perfect logic. Respiratory Motion gives us the conditions to further accelerate the rollout of TetraGraph while expanding our business of monitoring patients’ respiratory function outside the operating room. With Respiratory Motion’s unique system, we reach three times as large patient volume and lay the next building block in our journey to be the market leader in precision-based monitoring of vital signs with the overarching mission of eliminating anesthesia and sedation-related complications,” says Pia Renaudin, CEO, Senzime.
An initial consideration of 19 million USD
The Initial Consideration for 100 percent of the shares in Respiratory Motion on a cash and debt free basis amounts to 19 million USD. The potential earn-out payment amounts to up to 25 million USD. The Earn-Out is based on Respiratory Montion’s sales budged for 2023 and shall consist of either or both cash and shares in Senzime.
The total consideration, assuming full earn-out payment of 25 million USD, is equivalent of approximately 4.7x Respiratory Motion’s revenue budget for 2023.
“In addition, Senzime will conduct a new share issue of approximately 100 million SEK to finance working capital needs in Respiratory Motion and accelerate the growth journey, directed to Swedish and international institutional investors through an accelerated book-building procedure.”
To finance the Initial Consideration, Senzime’s Board of Directors has resolved to summon an Extraordinary General Meeting to authorize the Board of Directors to resolve on an issue through set-off of preliminary 8,655,238 shares. In addition, Senzime will conduct a new share issue of approximately 100 million SEK to finance working capital needs in Respiratory Motion and accelerate the growth journey, directed to Swedish and international institutional investors through an accelerated book-building procedure.
Completion of the acquisition is expected to take place during end of June 2022 and is conditional upon that an extraordinary general meeting authorize the Board of Directors to issue the Consideration Shares.
Read more: Senzime’s shares admitted for trading on Nasdaq Stockholm’s main market
Respiratory Motion is a Boston-based medtech company that develops and commercializes systems for the monitoring of respiratory function and other vital signs. The company’s solution – ExSpiron – is the only non-invasive system on the market that monitors patients’ breathing volume and real-time breathing frequency. ExSpiron is based on many years of research by physicians in the United States, and is protected by 14 patent families and proprietary algorithms. The system is CE and FDA approved and validated on over 6,000 patients in more than 30 scientific publications.
Similar to Senzime’s TetraGraph, ExSpiron is based on a “razor and razorblade” sales model powered by an installed base of monitors and disposable sensors. The estimated total addressable market in the United States alone amounts to more than USD 4 billion, which, combined with Respiratory Motions’ access to approximately 5,500 hospitals, enables rapid growth of the installed base of monitors. Respiratory Motion currently has a number of strategic agreements with some of the larger purchasing organizations in the USA through Group Purchasing Organizations.
Photo of Pia Renaudin: Senzime