$6 million cardiac health solutions company acquired for $65 million – at 10.8x revenue

On January 28, 2019, it was announced that Malvern, Pennsylvania-based BioTelemetry, Inc. (NasdaqGS:BEAT), a leading public company in the mobile and wireless medical technology industry, entered into an agreement to acquire 100% of Pasadena, California-based Geneva Healthcare, in a deal worth $65 million. The deal consists of $45 million to be paid in cash at closing with an additional earnout of at least $20 million, to be paid on the third anniversary of closing and be based on revenue for the trailing twelve-month period ending on the earnout date. Geneva may elect to have the earnout payment paid in 100% cash, 50% cash / 50% common stock, or 75% cash / 25% common stock.

With reported revenue of $6 million in 2018, the acquisition multiple translates to 10.83x revenue.

Founded in 2010 by cardiologists and technologists, Geneva has quickly become a trusted name in the remote monitoring space, offering a transformative solution for turning cardiac device data into actionable information, improving clinical workflow and patient care. Geneva, which will be integrated with BioTelemetry’s healthcare segment, will provide an unparalleled patient experience, leading to better information flow, satisfaction, and compliance.

The acquisition is not expected to be accretive to earnings in 2019. For 2019, Geneva is expected to generate at least $10 million in revenue with gross margins exceeding 60%. Geneva’s CEO, Yuri Sudhakar, stated, “BioTelemetry will give Geneva the necessary resources to significantly expand our reach in the over $1 billion domestic implantable cardiac device monitoring market.”

BioTelemetry will fund the acquisition with cash on-hand, borrowings under their current revolving credit facility, and / or a combination thereof.

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