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Masimo’s Latest Acquisition Could Help in the Fight Against COVID-19

The Irvine, CA-based company is acquiring TNI medical AG for an undisclosed sum. The deal is set to close in 2Q20. TNI has developed softFlow technology, which provides high flow, warmed and humidified respiratory gases to spontaneously breathing patients suffering from serious pulmonary conditions. Needham analyst Mike Matson said the acquisition could help Masimo weather the COVID-19 storm.

Image by Jo_Johnston on Pixabay

Masimo’s new acquisition could aid in the fight to help manage coronavirus (COVID-19) patients. The Irvine, CA-based company said late last week that it had entered into a definitive agreement to acquire ventilation company specialist, TNI medical AG for an undisclosed sum.

The deal is set to close in 2Q20 and Masimo expects to fund the acquisition with existing cash on hand and expects the transaction to have an immaterial impact on net earnings in 2020.

Würzburg, Germany-based TNI has designed the softFlow technology to provide high flow, warmed, and humidified respiratory gases to spontaneously breathing patients suffering from serious pulmonary conditions.

Masimo is no stranger to TNI. In August of 2019, the company disclosed an investment in TNI that included an exclusive option to buy.

“We have been closely monitoring TNI since Masimo made its investment last summer and are thrilled to see the tremendous progress they have made in such a short time,” Joe Kiani, Founder, Chairman, and CEO of Masimo said in a release. “Due to COVID-19, there has been an increasing demand for TNI’s softFlow technology. We decided to exercise our option to acquire the company well before the option expired to allow Masimo to scale manufacturing. We believe this technology will provide clinicians with important additional tools to address the growing number of people affected by pulmonary diseases and respiratory-related illnesses, including those suffering from COVID-19. This acquisition illustrates our commitment to improving patient outcomes and reducing the cost of care.”

Needham analyst Mike Matson praised the acquisition and noted it was one of several measures that could help Masimo weather the COVID-19 storm.

"Masimo has taken steps to help its customers during the pandemic including: acquiring TNI Medical (which offers a ventilation technology), offering its SafetyNet for remote monitoring of COVID-19 patients, and offering free licenses and discounted sensors for its rainbow monitoring parameters," Matson wrote in research notes. "At this point, we expect the COVID-19 pandemic to have a positive impact on Masimo's results but even if it's revenue and earning per share are hurt, we expect the impact to be much smaller than most of the other companies in our universe and we reiterate our Buy rating."

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