iRhythm to Buy VitalConnect in $287.5 Million Mixed Deal
The digital health care company said the wearable biosensor platform will add mobile cardiac telemetry and multi-vitals monitoring to its Zio franchise.
iRhythm Holdings, Inc. (IRTC), a digital health care company focused on cardiac monitoring, agreed to acquire Vital Connect, Inc., a privately held wearable biosensor and ambulatory cardiac monitoring company, for about $287.5 million, including roughly $237.5 million in cash and about $50 million in iRhythm common stock.
The cash portion is expected to be funded from existing cash on iRhythm’s balance sheet. The stock component is intended to align VitalConnect stakeholders with the combined company.
The combination is expected to immediately broaden iRhythm’s ambulatory cardiac monitoring portfolio, including in the mobile cardiac telemetry category, and add continuous multi-vitals monitoring. VitalConnect’s FDA-cleared platform spans multiple cardiac monitoring modalities and is designed for hospital and remote care settings.
“Today marks an important milestone as iRhythm continues its evolution toward a broader cardiac monitoring and intelligence platform,” said Quentin Blackford, President and Chief Executive Officer of iRhythm. “VitalConnect brings complementary mobile cardiac telemetry (MCT), multi-vitals and monitoring capabilities to iRhythm’s established end-to-end cardiac monitoring service. Together, we can offer clinicians greater choice, serve more patients and customers across the continuum of care, and deepen customer relationships.”
VitalConnect’s biosensor platform can monitor up to 11 physiological parameters, extending iRhythm’s multi-vitals strategy beyond traditional ambulatory cardiac monitoring. The deal creates additional opportunities in inpatient monitoring, remote patient monitoring and hospital-to-home care. VitalConnect contributes wearable biosensors, AI-enabled algorithms and cloud-based workflows; iRhythm brings cardiac diagnostics expertise, proprietary algorithms, clinical operations and commercial scale.
The transaction is expected to enhance iRhythm’s revenue growth rate beginning in 2027 while preserving a previously communicated 15% adjusted EBITDA margin target for that year. Management expects operating leverage from scale, infrastructure and efficiencies across the combined organization to help fund future growth investments.
iRhythm will provide VitalConnect with interim working capital financing to fund normal-course operations and certain specified expenses before closing, with an initial $10 million and additional increments up to an aggregate maximum of $30 million. Goldman Sachs & Co. LLC is acting as exclusive financial advisor for iRhythm, and Fenwick & West LLP is acting as legal advisor.
Mintu Turakhia, M.D., Chief Medical and Scientific Officer and Executive Vice President of Advanced Technologies at iRhythm, said VitalConnect complements Zio’s uninterrupted monitoring experience by adding flexibility across a broader range of clinical settings. Peter Van Haur, Chief Executive Officer of VitalConnect, said the combination is intended to bring a more compelling portfolio to a larger base of customers and patients than either company could deliver independently.