Safeguard Scientifics, Inc. (NYSE:SFE) (Safeguard or the Company) today announced that its partner company, Propeller Health, signed a definitive agreement to be acquired by ResMed (NYSE:RMD) (ASX:RMD) for $225 million in cash. The transaction is expected to close by end of March 2019, pending satisfactory completion of customary closing conditions and regulatory approval. Safeguard expects to receive cash proceeds of $41.4 million, which excludes an amount of additional proceeds to be held in escrow, representing an approximate 3x cash-on-cash return and 34% IRR. Safeguard deployed $14.3 million in Propeller since August 2014 and has a 20% primary ownership position.
"At Safeguard, we were early believers that digital technology would reshape healthcare," said Gary J. Kurtzman, MD, Managing Director at Safeguard and Board Member at Propeller Health. "This acquisition is not only a validation of that belief, but it is significant as it demonstrates that digital therapeutics have entered the mainstream of patient care. We are proud to have been a part of the Propeller journey and excited for the exceptional team as they extend and expand the platform as part of ResMed."
"Safeguard continues to make steady progress in our ongoing efforts to support the growth of and monetize our portfolio of partner companies," said Brian J. Sisko, Safeguard President and CEO. "Following the close of the transaction, Safeguard will have received over $120 million in cash proceeds related to monetizations of our partner company interests since our announced strategy change in January 2018." Mr. Sisko re-iterated that, "the Safeguard team remains committed to supporting our maturing portfolio, maximizing the overall value of our partner company holdings and monetizing such holdings, in both traditional and non-traditional ways, as opportunities arise."
About Propeller Health
Propeller Health is a leading digital therapeutics company dedicated to the development and commercialization of measurably better medicines. Propeller creates products to more effectively treat chronic respiratory disease and improve clinical outcomes for patients through connectivity, analytics, and companion digital experiences. The Propeller platform is used by patients, physicians and healthcare organizations in the United States, Europe and Asia. For more information, visit www.propellerhealth.com.
About Safeguard Scientifics
Historically, Safeguard Scientifics (NYSE:SFE) has provided capital and relevant expertise to fuel the growth of technology-driven businesses. Safeguard has a distinguished track record of fostering innovation and building market leaders that spans more than six decades. For more information, please visit www.safeguard.com.
