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Masimo (MASI) Gets New Suitors for Its Consumer Business Sale
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Masimo (MASI - Free Report) recently announced that it has received unsolicited inbound requests from several entities to acquire its consumer audio business. These requests followed the expiry of the exclusivity period granted to the previously disclosed non-binding term sheet for a potential joint venture (JV).
In May, Masimo and a third party entered into a non-binding term sheet to sell the majority stake in the former’s consumer audio and consumer health businesses. The third party offered to acquire a stake in MASI’s consumer business for a purchase price of $850-$950 million on a cash and debt-free basis, following the completion of six weeks of due diligence. Masimo had granted an exclusivity arrangement with respect to the Potential JV until mid-August, per the terms of the deal.
MASI plans to continue with the discussion on the potential JV. It will also seek and evaluate the recent request for the optimal value-maximizing structure of the separation. The current term sheet offer is lower than the acquisition price paid by Masimo, implying a potential loss for shareholders.
The company may seek to separate its business using any of these paths — a joint venture, spin-off of the consumer business into a new public company or complete sale of the consumer audio business, with or without the consumer health business. However, it will continue to retain its professional healthcare and telehealth/telemonitoring products.
MASI’s shares have risen 5.3% year to date compared with the industry’s 7.2% growth. The S&P 500 has increased 16.5% in the same time frame.
Image Source: Zacks Investment Research
Consumer Business Separation
Masimo paid more than a billion dollars to acquire Viper Holdings Corporation, adding the consumer business to its portfolio in 2022.
The term-sheet offer came amid Masimo’s tussle with activist investor Politan Capital, which has been criticizing the Viper Holdings deal since it joined the company’s board last year. Politan has been pressurizing for a separation of the consumer business since the beginning. Politan is also concerned about the transfer of IP rights to the consumer business unit following its separation.
On its second-quarter earnings call, MASI stated that the separation path for its consumer business will be chosen based on the unanimous decision by its board of directors. The company mentioned that it will choose the deal that will help it meet its long-term goal of attaining $8 earnings per share in five years. The company will provide further updates on the deals as they develop.
Recent Developments
Apart from focusing on its consumer business separation, Masimo continues to expand its product portfolio.
Earlier this month, Masimo received the FDA’s 510(k) clearance for its W1 medical watch. The approval allows the watch to be integrated with the Masimo SafetyNet comprehensive telemonitoring solution. The Masimo W1 medical watch and the integrated Masimo MW-1 module are indicated for adults in hospitals, clinics, long-term care facilities and homes.
The company announced Sleep Halo, a powerful new feature, for its Masimo W1 Sport advanced health tracking wearable, intended for scientifically based sleep analysis in June. Sleep Halo is likely to offer overnight sleep data tracking with an unmatched 70,000+ daily measurements of second-by-second continuous health data.
DaVita has an estimated long-term growth rate of 17.5%. DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.2%.
DaVita’s shares have risen 43.4% year to date compared with the industry’s 14.3% growth.
Aspen Technology has an estimated long-term growth rate of 13.1%. AZPN’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average surprise being 4.24%.
Shares of Aspen Technology have lost 4.2% year to date against the industry’s 13.5% growth.
Universal Health Services has an estimated long-term growth rate of 19%. UHS' earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.
The company’s shares have risen 48.6% year to date compared with the industry’s 39.7% growth.
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Masimo (MASI) Gets New Suitors for Its Consumer Business Sale
Masimo (MASI - Free Report) recently announced that it has received unsolicited inbound requests from several entities to acquire its consumer audio business. These requests followed the expiry of the exclusivity period granted to the previously disclosed non-binding term sheet for a potential joint venture (JV).
In May, Masimo and a third party entered into a non-binding term sheet to sell the majority stake in the former’s consumer audio and consumer health businesses. The third party offered to acquire a stake in MASI’s consumer business for a purchase price of $850-$950 million on a cash and debt-free basis, following the completion of six weeks of due diligence. Masimo had granted an exclusivity arrangement with respect to the Potential JV until mid-August, per the terms of the deal.
MASI plans to continue with the discussion on the potential JV. It will also seek and evaluate the recent request for the optimal value-maximizing structure of the separation. The current term sheet offer is lower than the acquisition price paid by Masimo, implying a potential loss for shareholders.
The company may seek to separate its business using any of these paths — a joint venture, spin-off of the consumer business into a new public company or complete sale of the consumer audio business, with or without the consumer health business. However, it will continue to retain its professional healthcare and telehealth/telemonitoring products.
MASI’s shares have risen 5.3% year to date compared with the industry’s 7.2% growth. The S&P 500 has increased 16.5% in the same time frame.
Image Source: Zacks Investment Research
Consumer Business Separation
Masimo paid more than a billion dollars to acquire Viper Holdings Corporation, adding the consumer business to its portfolio in 2022.
The term-sheet offer came amid Masimo’s tussle with activist investor Politan Capital, which has been criticizing the Viper Holdings deal since it joined the company’s board last year. Politan has been pressurizing for a separation of the consumer business since the beginning. Politan is also concerned about the transfer of IP rights to the consumer business unit following its separation.
On its second-quarter earnings call, MASI stated that the separation path for its consumer business will be chosen based on the unanimous decision by its board of directors. The company mentioned that it will choose the deal that will help it meet its long-term goal of attaining $8 earnings per share in five years. The company will provide further updates on the deals as they develop.
Recent Developments
Apart from focusing on its consumer business separation, Masimo continues to expand its product portfolio.
Earlier this month, Masimo received the FDA’s 510(k) clearance for its W1 medical watch. The approval allows the watch to be integrated with the Masimo SafetyNet comprehensive telemonitoring solution. The Masimo W1 medical watch and the integrated Masimo MW-1 module are indicated for adults in hospitals, clinics, long-term care facilities and homes.
The company announced Sleep Halo, a powerful new feature, for its Masimo W1 Sport advanced health tracking wearable, intended for scientifically based sleep analysis in June. Sleep Halo is likely to offer overnight sleep data tracking with an unmatched 70,000+ daily measurements of second-by-second continuous health data.
Masimo Corporation Price
Masimo Corporation price | Masimo Corporation Quote
Zacks Rank & Other Stocks to Consider
Masimo currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are DaVita (DVA - Free Report) , Aspen Technology and Universal Health Services (UHS - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita has an estimated long-term growth rate of 17.5%. DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.2%.
DaVita’s shares have risen 43.4% year to date compared with the industry’s 14.3% growth.
Aspen Technology has an estimated long-term growth rate of 13.1%. AZPN’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average surprise being 4.24%.
Shares of Aspen Technology have lost 4.2% year to date against the industry’s 13.5% growth.
Universal Health Services has an estimated long-term growth rate of 19%. UHS' earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.
The company’s shares have risen 48.6% year to date compared with the industry’s 39.7% growth.