HILLROM TO ACQUIRE BARDY DIAGNOSTICS, INC.
January 19, 2021
1
© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential
Forward Looking Statements And Non-GAAP Financial Measures
This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included herein that are not historical facts are forward-looking statements, including without limitation statements regarding Hillrom's ability to drive sustainable profitable growth and shareholder value, the timing and success of new product launches and portfolio expansion, the achievement of long-range financial objectives, the continuation of stable customer demand trends, a stable U.S. capital environment, the timing and success of M&A and business optimization initiatives (including Hillrom's acquisition of Bardy Diagnostics), our ability to reduce debt, implementation of our IT transformation, the impact of tariffs, any change to the one-time impact from U.S. tax reform legislation, and all other statements concerning future strategy, plans, objectives, projections, expectations and intentions. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Hillrom's results could be materially adversely affected. Hillrom's actual results also could be materially adversely impacted by the length and severity of the coronavirus pandemic ("COVID-19," "COVID," or "the pandemic") and related impacts on our business, results of operations, financial condition and prospects. For a more in-depth discussion of factors that could cause actual results to differ from those contained in forward-looking statements, see the discussions under the heading "Risk Factors" in the company's previously filed most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Except as required by applicable law or regulations Hillrom assumes no obligation to update or revise any forward-looking statements.
Certain financial figures presented herein have been presented on an adjusted basis (non-GAAP). Reconciliation between non-GAAP financial measures and reported GAAP financial measures are included in the appendices to this slide deck.
2
© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential
Hillrom
OUR MISSION
Enhancing outcomes for patients and their caregivers
OUR VISION
Creating Meaningful Value
With Hillrom's Connected Care Vision
Diversified Portfolio | Innovation Pipeline | Strong Financials | |||
• | Accelerating transformation | • Delivering $570M+ in New | • Driving durable top-line growth | ||
with category leadership | Product (NP) revenue in fiscal | and record margins in fiscal | |||
strategy globally | 2020 with 6+ new launches | 2020 | |||
• | Creating value across acute | • Launching 10+ new products in | • Enhancing long-term financial | ||
care, primary care and home | fiscal 2021; adding $50M+ of | performance with MSD revenue | |||
care settings | incremental NP revenue | and DD adjusted EPS growth | |||
4
© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential
Successfully Transforming Our Portfolio
Patient Support Systems | Front Line Care | Surgical Solutions | ||
Accelerates leadership in attractive Mobile | Leverages existing Respiratory Health | Provides operating room video and data |
Communications Market with a well- | platform to bring a differentiated product | integration entry point into "Connected |
established product, industry recognition, | offering into new, attractive adjacent | Surgery" with a scalable platform for |
and high levels of customer satisfaction | segment that leverages our business model | surgical data management |
Surgical Consumables (Divestiture) | |||||
Differentiates Hillrom as only provider of | Captures vital signs data from monitors with | Divestiture of lower-growth and lower- | |||
comprehensive mobile communications | stand-alone connectivity solution and | margin business of surgical consumables to | |||
solution (voice, text, patient context, alert & | provides patient monitoring visualization in | strengthen focus of resources on building a | |||
alarm, MDI and digital waveforms) | acute care environments | suite of differentiated connected solutions | |||
Strategically Deploying Capital To Advance Category Leadership
Across Attractive Growth Platforms
5
© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential
Hillrom To Acquire Bardy Diagnostics, Inc.
High Growth Segment | Differentiated | Platform |
With Attractive | Connected Care | Technology For |
Margin Profile | Platform | Future Innovation |
Providing Attractive Revenue Growth And Margin Profile In Diagnostic Cardiology And
Future Roadmap For Hillrom's Digital Transformation
6
© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential
Compelling Strategic Opportunity
Complements Hillrom's vision of Advancing Connected Care
High-growth,high-margin connected platform for diagnostic cardiology
Provides differentiated wearable bio-sensing technology
Patient-comfort device design; superior P-wave clarity, clinical accuracy, and diagnostic yield
Enhances Hillrom's strategic priority of category leadership
#2 player in Long-Term Holter (LTH) segment with profitable recurring revenue stream
Drives competitive advantage and accelerates adoption
Leverages HRC capabilities: market access, payor contracting, data security, and EMR integration
Leverages existing U.S. brand, channel and presence
Across acute care, primary care, and cardiology customer segments
Affords future optionality in expanding platform technology
Across remote patient monitoring within diagnostic cardiology
7
© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential
Driving Competitive Advantage With Unique Digital Offering
BardyDx Profile | Product Overview | Financial Highlights |
$30M | 60%+ | 10% | ||||||
CAM™ | BardyDx | CAM™ Report | Annualized | Gross | Expected ROIC | |||
Patch | Connect | Monarch (AI) | ||||||
Revenue | Margins | In Year 5 | ||||||
Run Rate | ||||||||
✓ Digital health innovator and #2 LTH | ✓ Differentiated, wearable bio-sensing | ✓ Profitable recurring revenue growing | ||||||
device and services provider | technology promotes compliance | 20%+; accretive gross margin | ||||||
✓ Based in Seattle, WA with 230 | ✓ Approved in the U.S., Canada, and | ✓ Established CMS and private payor | ||||||
employees | the UK | Level 1 CPT reimbursement code | ||||||
✓ Inspired mission of saving patient lives | ✓ Yields clinically actionable data with | ✓ Robust innovation roadmap to drive | ||||||
with differentiated platform | P-wave centric ECG technology | future value | ||||||
✓ IDTFs process data and provide | ✓ Aids clinical decisions and enables | ✓ Attractive ROIC expected by Year 5 | ||||||
diagnostic CAM Reports to physicians | identification of specific arrhythmias | |||||||
8
© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential
Attractive High-Growth Market
Ambulatory Cardiology | Long-Term Holter |
Market | Segment |
+10%+ | +20%+ |
CAGR | CAGR |
~$1.7B | |
~$800M | |
~$1.0B | |
~$300M |
2020 | 2025 | 2020 | 2025 |
Growth Drivers
- Underlying symptomatic patient population growing 4%-5%
- Due to age and prevalence of comorbidities
- Rise of consumer wearables and investment in clinical studies on asymptomatic screening
- Shift from other modalities to higher- growth LTH segment
- Improved diagnostic yield and preference for patient-centric form factors (patch)
- Establishment of permanent Category 1 CPT code for LTH
Compelling Market Growth Potential With Stable Reimbursement Landscape
9
© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential
Transaction Summary
Key Deal
Terms
Financial
Implications
Other
Considerations
- $375M upfront cash consideration
- Potential future commercial tiered milestone payments
- Financed with cash on hand and borrowings under existing credit facilities
- Acquiring net operating losses valued at $20M+ resulting in future tax benefits
- 2020 annualized revenue run rate of $30M; gross margin of 60%+
- Transaction expected to be dilutive in fiscal 2021 by ~$0.10 per diluted share
- Transaction expected to be dilutive in the first twelve months and increasingly accretive thereafter
- Transaction expected to generate 10% return on invested capital in year five
- Expected to close during fiscal Q2 2021 subject to customary closing conditions
- Do not expect the transaction to have an impact on previously-issued fiscal 2021 financial guidance
10
© 2021 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential
Attachments
- Original document
- Permalink
Disclaimer
Hill-Rom Holdings Inc. published this content on 19 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 January 2021 14:17:07 UTC