In an attempt to expand its foothold in the home medical equipment (HME) industry, California-based ResMed Inc. (RMD) has purchased Internet-driven software solutions provider, Jaysec. Financial terms of the transaction remain undisclosed.
Tennessee-based Jaysec develops Internet-based software applications that provide informative solutions for the HME industry. The company helps streamline HME business practices like resupply for patients and communication with referring medical providers.
Through this acquisition, ResMed will experience reduced administrative burden owing to the self-serve software portal specifically designed for HME providers. This, in turn, will allow the company to enhance patient care in the HME market speedily and at lower costs.
Jaysec's popular GoJaysec automated resupply solution is the industry's leading referral and patient management software application. This software uses interactive voice, text and secured email communications to electronically obtain all required documentation and maintain patient records, in a cost-effective manner.
Formed in 2002, Jaysec currently serves almost 100 HME customers in the U.S., mostly national HME accounts and a small number of home health providers. The takeover of Jaysec will thus also allow ResMed to access a significant customer base in the HME market.
Management estimates that approximately 35% to 45% of diagnoses over the last 12 months in the country were done through home sleep testing (HST). HST volumes have increased reasonably from the single digits witnessed in the past, thus resulting in higher sales and gross margin for ResMed.
We expect this buyout will be beneficial for ResMed's revenues in the coming quarters. A rise in HST will induce more utilization of Jaysec's software, which is now owned by ResMed.
Currently, ResMed carries a Zacks Rank #3 (Hold). Some better-ranked medical product stocks are Abaxis, Inc. (ABAX), Cardiovascular Systems Inc. (CSII) and Phibro Animal Health Corp. (PAHC). All three stocks sport a Zacks Rank #1 (Strong Buy).
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