ResMed has sold its MatrixCare software division to Frazier for $490 million.

      ResMed has reached an agreement to sell MatrixCare, its software business for home health and senior care, to private equity firm Frazier Healthcare Partners for $490 million in cash. This transaction allows the medical-device company to divest a unit it has maintained for years, enabling it to concentrate on its core products.

      MatrixCare is a substantial business on its own, generating approximately $220 million in revenue during ResMed's 2026 fiscal year and around $55 million in non-GAAP operating profit. This sale occurs amid a broader trend of software divestitures, similar to Ametek’s acquisition of Indicor’s instrumentation divisions, where buyers are acquiring established units that the sellers no longer consider central to their main operations.

      The deal encompasses MatrixCare and the software historically associated with that brand, including HealthcareFirst and Citus, as well as ResMed’s home health and hospice solutions. However, it excludes two businesses that ResMed will retain: its US-based Brightree unit and MEDIFOX DAN in Germany.

      Frazier, which focuses on healthcare investments, finds value in MatrixCare as a profitable software provider well-placed in the expanding market for home and post-acute care. These systems are crucial for care providers in managing visit schedules, records, and payment processes.

      MatrixCare’s software supports the administrative operations of skilled nursing facilities, home health agencies, and hospices, handling essential record-keeping that these providers depend on. Its steady, recurring revenue model makes it particularly appealing to private equity firms while being less critical to a devices manufacturer.

      In contrast, ResMed's primary focus is on hardware. The company is renowned for its machines and masks used to treat sleep apnea and other respiratory conditions, a sector it has dominated for years and considers integral to its future.

      ResMed positioned the sale as part of its 2030 strategy, which emphasizes sleep health, breathing health, and connected home care. The divestment of a software unit that doesn't align well with this strategy is intended and not an unintended consequence.

      The proceeds from the sale will primarily benefit shareholders. ResMed indicated it plans to use the net proceeds to return capital, including through an accelerated share repurchase program, with the remaining funds allocated for general corporate purposes.

      This decision reflects ResMed's view on where it can generate the best returns. Instead of investing the capital into new software ventures, it prefers to repurchase its own shares and focus on its established hardware and services.

      ResMed's experience with software has been inconsistent. While it developed a range of tools to enhance its devices and data, operating independent applications for third-party care providers presents a different challenge compared to selling ventilators and masks.

      Meanwhile, private equity continues to acquire such assets aggressively. This trend is evident across the market, from health insurers like Alan integrating AI into preventive care coverage to investor-backed roll-ups creating software portfolios from neglected divisions.

      The transaction is anticipated to finalize in the first quarter of ResMed's 2027 fiscal year, pending standard conditions. Neither party has disclosed how MatrixCare’s employees or product development plans will be managed after the acquisition.

      The sale price also reflects current market valuations for health software. At $490 million against about $220 million in revenue, the deal is significantly lower than the high multiples that such assets garnered in the past, indicating that buyers have become more cautious.

      For ResMed, this sale represents a strategic cleanup of its portfolio just as it aims to concentrate investors' attention on its devices and connected care goals. What steps it will take with a leaner, more focused business remains to be seen.