Masimo Update: Potential Partner Emerges Ahead of Shareholder VoteMasimo Update: Potential Partner Emerges Ahead of Shareholder Vote
A potential joint venture partner is prepared to make an offer for Masimo’s consumer business. But the details of the deal matter.
July 12, 2024

A potential joint venture partner is prepared to offer $850 million to $950 million for Masimo’s consumer business on a cash and debt-free basis, the company disclosed in an SEC filing this week.
In March, Masimo revealed plans to separate from its controversial consumer business. The company said it would consider options such as a spinoff of the consumer business in the form of new stock issued to existing shareholders as a dividend or the sale of at least a majority stake in the consumer business to a third party.
According to the filing, this potential partner has conducted six weeks of due diligence and is also contemplating a short-term extension of an exclusivity period between the parties through mid-August because one or two other companies may join this potential JV and need time to do their due diligence.
Masimo noted in the filing that certain terms are still under discussion, such as the scope of the intellectual property rights that would be granted to the potential JV. Masimo said it has proposed to license certain intellectual property rights for use solely within the consumer field. The license would not extend to the healthcare field. In addition, Masimo has proposed to retain the litigation with Apple. Masimo also said it intends to negotiate a higher price.
Marie Thibault, a medtech analyst at BTIG, wrote in a report this week that the purchase price range is lower than the $1.025 billion that Masimo paid for Sound United in 2022. She also noted, however, that the purchase price is “higher than we expected though the details of the deal matter,” as the cash deal would be enough to defray much of Masimo’s $876 million debt obligations.
Details of this potential JV deal come just ahead of the July 25 stockholders’ meeting, in which activist investor Politan Capital Management is vying for two additional board seats after winning two seats in last year’s proxy battle.
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