Hello, and welcome to the ResMed webcast conference call. My name is Kevin, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. Please note this conference is being recorded. I will now turn the call over to Amy Wakeham, Vice President, Investor Relations and Corporate Communications. Amy, you may begin. Great. Thank you, Kevin, and thank you all for joining us today to discuss this exciting announcement of ResMed's latest acquisition. By now, I expect you all have seen the press release we issued overnight announcing a signed definitive agreement to acquire MEDIFOX DAN, a German leader in out-of-hospital solutions for providers in major settings across the care continuum. The press release is posted on our website, as is the investor presentation, both of which were filed with the SEC via a Form 8-K earlier this morning. Today's call will focus on the announced acquisition. We will not be providing any financial or operational updates to the quarter. I do wanna remind you that our discussion today may include forward-looking statements, including but not limited to, statements about future expectations, plans and prospects for ResMed, our corporate strategy and performance, including the integration of acquisitions. We believe these statements are based on reasonable assumptions, but our actual results may differ from those materially indicated. Information on important factors which could cause our results to differ from any forward-looking statements are detailed in the filings we make with the SEC. Joining me on the call today are Mick Farrell, our CEO. Other members of the management team will be available during the Q&A portion of the call. I will now turn the call over to Mick. Thanks, Amy, and thanks to all our investors who are joining us today for this exciting announcement of an acquisition of a very scarce asset with software-as-a-service growing very quickly and profitably at scale in Europe. Look, let me just back up before we get into the slides that as Amy referred to are available on the website, and I'll walk through that slide deck and then we'll get into Q&A. Before I do, let's roll back to fifty thousand feet and talk about ResMed's M&A strategy. We talk about this almost every quarter. Every time we get asked, "What are you doing with the free cash flow?" Well, you know, mostly we're investing it back in R&D. We put 7%-8% into R&D for ResMed. Of course, we invest in SG&A and marketing and sales and growth of our commercial teams. We invest in giving back to our shareholders through dividends. The other use for capital is M&A. When we do that, we're very careful, and we look at three criteria. The first criteria is strategy. We only look at companies that are aligned with our ResMed 2025 and our emerging ResMed 2030 strategy. In 2025, our goal is to improve 250 million lives, to help people sleep better, to help people breathe better, and to help people live better lives with software and digital health products in out-of-hospital healthcare. This acquisition of MEDIFOX DAN fully aligns with our strategy. The second thing that we look at is the financials. We only look at opportunities with a really good solid financial return and assets that ResMed is truly the best owner of the asset. In this case, with MEDIFOX DAN, we truly believe we're the best owner of this asset and integrator of this team into the ResMed family. That's because the revenue growth of MEDIFOX DAN is accretive to our SaaS business at 14% CAGR. It's a profitable growth company. Profitable growth such that it'll be non-GAAP EPS accretive within the first year, pretty much from day one. The third criterion that we look at is culture. We look for a management team that is a cultural alignment with ResMed. People in the management team and through the org that will become true ResMedians. What does that mean? That means honesty. It means integrity, which as C.S. Lewis said, "Integrity is doing the right thing, especially when no one's watching." That they're innovative and entrepreneurial. This company, MEDIFOX DAN, was started just five years after ResMed. You know, we were founded in 1989, management buyout from Baxter, by my father and eight colleagues in 1989. This was started by some software entrepreneurs in 1994, and its two Co-CEOs have been in place for 17 years and 11 years, respectively. It's a really strong leadership team, and it's not just a strong leadership team that you can see on the website. That leadership strength and bench strength goes deep into the org, into the sales org, into the technology org, and into the quality systems that they have. With that as a sort of opener, this MEDIFOX DAN's acquisition meets our strategy. It meets the financial return that we look for, and it's a great cultural fit to ResMed. That's what we've been looking at in due diligence over the past number of weeks, and we're really excited to announce this acquisition publicly. Let's now turn to a quick review of the slides. Since I don't have the webcast going on slides, I'll just call out the slide numbers. Slide one is just an intro. Slide two is the forward-looking statements that Amy covered at high level. Please read through that at your leisure. Slide three sort of gets into what we're talking about here, which is a combination of ResMed as the leading global provider of technology for respiratory medicine in sleep apnea, COPD, asthma, and respiratory insufficiency associated with neuromuscular disease. ResMed stands for residential medicine. All the software and technology that we have through Brightree for HMEs and home infusion and through MatrixCare with skilled nursing facilities, home health, hospice, and beyond. Now we're adding on MEDIFOX DAN. MEDIFOX DAN is the leading German provider of end-to-end software solutions for both home health providers and nursing homes. They have a fast-growing business in, although it's smaller, in outpatient therapy practices in Germany. Fully aligned and actually very analogous, if you think about it, to our MatrixCare business, but maybe a little more focused with just three verticals versus the five, six, or stretched to seven that MatrixCare has in some of the smaller verticals that it's in. Really strong position in home health and nursing homes. MEDIFOX DAN is number one or number two in those verticals. Turning to slide four. Look, this is a strategic expansion of our SaaS portfolio into Europe. We've had many questions from both the sell side and the buy side over time. Why is your SaaS business solely focused on the U.S.? Our response has been, well, that's sort of where a lot of the innovation and pathways have gone forward, and that's why we found Brightree, partnered with Brightree, and then bought Brightree in 2016, and similarly with MatrixCare in 2018. We've been watching MEDIFOX DAN for a number of years, you know, back three, four, five years, and really seeing the evolution of the German digital health system, the German out-of-hospital software care system. Some really interesting changes have happened to German reimbursement with DiGA and DiPA, and we're investing in entrepreneurial partnerships and some of our own technologies as associated with DiGA and DiPA. Obviously, we drive AirView and myAir penetration with our AirSense 10 and now AirSense 11, that's just been launched into Europe. This is our first foray into a pure play SaaS business in Europe. We see it as a great opportunity to expand our capabilities from just a US-centric SaaS business to truly starting to become a global one and starting with our second biggest market and our biggest market in Europe, which is Germany. Second, it's an acquisition of a market leader. I mean, look, as I said earlier, they're number one or number two in home health and nursing homes, and they've got a really fast-growing outpatient therapy business. We like to partner with market leaders, and we like to buy market leaders 'cause they got there for a reason. Great technology, great sales team. Number three here, the combination is positioned to accelerate innovation in sales. You know, a huge part of the diligence for us was, let's meet the tech team, let's understand how they evolve this tech, and let's meet the sales team, and understand how they're involved with customers. There is some overlap of the customers that MEDIFOX DAN looks at and the customers that we have and partners that we have through our German healthcare and our German dealer business, which is run by Katrin Pucknat, who sits on our CEO operations team with Rob and me. They've got really deep experience in not only on-prem but cloud data, and have got a really solid plan for the transition of customers and moving them through that. Number four, you know, as I said earlier, this is an attractive financial profile. It's immediately accretive to non-GAAP EPS at day one, and a high proportion of the software revenues are from recurring revenue. I really love recurring revenue. One time is okay, recurring is a lot better, and that's where we focus our Brightree MatrixCare growth, and that's where MEDIFOX DAN has focused their approach. Moving on to slide five. Look, you can get all this from the 8-K in a lot of detail, but at a high level, we're looking at $80+ million in revenue, $35+ million in EBITDA, looking trailing 12 months. It's really calendar year 2021 we're looking there, so it's a little north of that, trailing 12 months. 14% CAGR going back 2019 through 2021, and over 8,000 customers in home health, home nursing homes and through the outpatient therapy as well. Over 300,000 caregivers involved using the platform and 600 employees. So there's just some of the facts and figures. Moving to slide six. I'm actually not gonna walk through this in detail. If you have questions, Bobby Ghoshal, who's the president of our SaaS group, is, you know, actually on vacation this week, but he's come off that, and he will be joining us on the line for any drill-down questions around this. You can see the businesses in home health and in nursing home and in outpatient therapy, some of the core capabilities, including billing and administration, care plan, documentation, and staff rostering are some of the major areas. Moving on to slide seven. Look, caregivers in Germany, like all the 140 countries that ResMed does business in, are looking for efficiencies. Labor shortages are not unique to the United States. You know, we've got very low unemployment, but low labor force participation rates, not just in the U.S., but that's happening in Europe, particularly Western Europe and particularly Germany. We think that our ability to help and some of the innovation we've done in our U.S. businesses around that have helped and MEDIFOX DAN is doing that in a really good way. Like the U.S., and even more so, Germany has an aging population with a rising, you know, prevalence and incidence of chronic disease, sleep apnea, COPD, neuromuscular disease, asthma, we're all aware of, but MEDIFOX DAN stretches across a whole bunch of other, chronic diseases, including those. You know, the last point on this slide is that governments in Europe are not, you know, always the most, innovative, but when they move, they move with force. France, as you all know, changed and has cloud-connected CPAP sleep apnea therapy reimbursed at a higher rate than non-cloud connected. The French government analyzed that for 5-7 years, but at the end of that, it made a huge change to the industry. We're looking at Germany's changes just right here in the last 12 months to regulations and we think that's gonna be a huge tailwind for the business. Slide eight, which is our second last slide. I won't go through this in detail, but you can see how Brightree at the left-hand side of the portfolio focused on HME providers and pharmacy infusion, and MatrixCare focused across its six verticals, and how MEDIFOX DAN overlaps with MatrixCare and creates a new vertical there in outpatient therapy, but really similar operations. Out-of-hospital healthcare is where ResMed focuses. It's the lowest cost place to take care of a patient. It's the lowest acuity place to take care of a patient. It's the lowest chance of infections with E. coli or staph infections or COVID or any other communicable disease. People just want to age in place. People wanna be treated in the home at best, and if not, well, take me to a nursing facility. Take me to an outpatient care versus going to inpatient. COVID has just accelerated both those trends, the digital health adoption and the out-of-hospital health care. It's where 90% +, 95% of ResMed's revenues and profits come from out-of-hospital health care. Closing with slide nine, transaction details. It's EUR 950 million. At today's spot rate, that's around $1 billion. It's an all-cash transaction. We have access to cash and through our debt capacity to pay this. You know, I walked through it. It's $83 million revenue for calendar year 2021. EBITDA north of $35 million. Strong double-digit organic growth profile, 14% growth. We've got a very strong pro forma to see that continue through our models and with the team and the momentum they have. Immediately accretive to non-GAAP EPS and accretive to revenue growth for our SaaS division, both of those outside the gate. The closing, because it's Europe and there's lots of regulations, we expect that to happen through December 2022. You know, over the next six months or so, and that'll be subject to all regulatory clearances. We think we'll get through those. It just takes time. That's it for the summary. Slide 10 says Q&A. With that, no further ado, Amy, am I handing back to you or am I handing- Yep. Nope. Over to Kevin? It's me. I'll hand it right back to Kevin. Thanks, Amy. Kevin, we're ready for the Q&A portion of the call. Thank you. We'll now begin our question-and-answer session. If you'd like to be placed into question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset or take your phone off mute before pressing star one. As a reminder, we ask you please limit yourself to one question. If you have another question, you're welcome to hop back into the queue. Our first question today is coming from David Bailey from Macquarie. Your line is now live. Yeah, thanks. Good morning, Mick. You sort of touched on it in the presentation, but there has been some changes in Germany under the Digital Healthcare and Nursing Modernization Act. I'm wondering if there's anything specifically you can call out there which you might see as supplementing growth to the existing business. Well, thanks for the question, David. I saw your note out actually before our announcement because there was some rumor from one of the trade press, and you were pretty spot on if you look at it from what we actually have said here in our press release and on the call today. Thanks for being on the ball and looking at it that way. Yeah, I saw that in your note. You noted that in mid-2021, the German government through DiPA and DiGA has really you know, with a lot of analysis going into it, made the decision to invest in digital health and digital care. Bobby, I don't know if you wanna walk through any details of specific areas. I mean, you know, we wanna keep things here at a sort of a 50,000 feet level, just announcing the acquisition. Bobby, any examples of some potential areas that we could benefit from DiPA or DiGA or any of the other German digital healthcare legislation that could give some tailwinds to our MEDIFOX DAN business? Yeah. Thank you, Mick. David, great question. That's definitely an area for us to look at. You know, I'll just start by saying, you know, even though MEDIFOX DAN team speaks German and my team is mostly U.S. based, broadly English speaking, from our first engagement, we had a common language of solving our customer problems. As Mick said, the biggest issues that we've been seeing our customers are facing are around staffing shortage and how do you navigate through the very complex regulatory reimbursement related ecosystem. A lot of this, we see commonality in what we are already doing in the U.S. In Germany, specifically around the regulations that the government has around DiGA and DiPA. I think in general, DiPA might be more relevant to our MEDIFOX DAN organization. As you know, we have 8,000 + customers that are teams in MEDIFOX DAN through our solutions that we provide health for. I see a lot of opportunity ahead. I mean, some of the examples we can think of are, you know, things how we are optimizing, for example, the route planning using the software that MEDIFOX DAN has. In the US, we have clinical advanced insight. Those are some data-driven ways to improve care and outcome for most at-risk patients. There's multiple ways that we can bring about the solution. We are looking forward to exploring those avenues as we move forward. Thanks for the question, David. Thank you. Our next question is coming from Gretel Janu from Credit Suisse. Your line is now live. Thanks. Good morning. Mick, just wanted to touch a little bit more on the financial metrics. Can you give any detail about what your ROIC targets are for this acquisition? Yes. We have Hemanth Reddy, who's the sort of mastermind, our Chief Strategy Officer, and is playing our Chief Financial Officer on this call 'cause it's 1:00 A.M. in Sydney right now, and Brett's hopefully in REM sleep. We're a good sleep company, and I like my CFO to get sleep between 1:00 A.M. and 5:00 A.M. Hemanth, if you don't mind going into the ROIC question that Gretel's posed. Happy to. Thanks, Gretel, for your question. In general, we feel very comfortable with our ability to earn a strong financial return on this particular acquisition. It's one that's got strong fundamentals in terms of growth, profitability, cash flow generation. That's just on a standalone basis before any of the opportunities to add value as Bobby just outlined. All of that, you know, should set us up for really strong cash flow generation and returns on this particular acquisition. As it relates to ROIC in particular, I think the way we sort of think about it is, there's an opportunity to continue to pay down the debt that we're using to fund this acquisition, and therefore earn a very strong return for our shareholders over the time that we own this business and drive its acceleration towards the digitization of healthcare in Germany. Our long-term targets are to have ROIC exceed WACC, and we see a clear path to doing so as well. The only thing I'd add on to that great answer, Hemanth, is that, you know, if you look at this acquisition, EUR 950 million, just around $1 billion, that's basically the equivalent of approximately 12 months of ResMed's cash flow. This is a very, you know, digestible business for ResMed in those 12 months. During those 12 months we can pay this off directly and we'll balance our debt to equity as we choose and appropriately. It'll be accretive from day one. All 365 of those days, it's accretive to our bottom line, non-GAAP EPS. Really excited about this acquisition. I think it makes a whole lot of financial sense, but just as importantly, actually, frankly, more importantly, it makes a whole lot of strategic sense. Thanks, Gretel. Thank you. Next question is coming from Craig Wong-Pan from Royal Bank of Canada. Your line is now live. Thanks. Just wanted to understand how the business was affected by COVID, and if those performer revenues have any negative impacts from COVID in them. Yeah, Craig, it's a good question. I mean, clearly, you know, nursing home volumes and impacts were very significant in the U.S., and we saw that in our MatrixCare business. I think to a lesser extent, Germany, you know, Angela Merkel took a pretty strong approach with a strong lockdown, and the complication rates in outpatient care and nursing home care were not as great as particularly the Northeast of the U.S., which is where we saw the biggest impacts on nursing homes, New York, New Jersey and some other states, Pennsylvania and the Northeast. So really not a huge down, maybe some partial, you know, impact down in terms of census rates there that would have impacted and been part of that. That's good news for us in terms of growing out of that. We're certainly seeing around the world as we look at the data around COVID-19, that there's recovery of patient flow through the system. Actually one of our fastest recovering countries has been Germany, where we've got cleaning protocols and capabilities to get home sleep apnea testing, but also in-lab testing going through. I think we're seeing that across the board. Bobby, any further detail you wanna provide in terms of the census rates? I mean, obviously, you know, in home health, no negative down, actually an increase, people wanting to get more home health. I guess that relates to the second segment there in nursing homes. Any comments on that, Bobby? You covered it, Mick. Actually, you're right. You know, between the nursing home side of the business and home health, we've seen there's been, you know, some offsets there. A lot of the patient flow has moved towards home health during COVID specifically. We're seeing the nursing home segment also catch up to near pre-COVID levels now, especially in Germany. It's a bit slower in the U.S. Between the two, we have not seen in the overall case, especially for MEDIFOX DAN, much of an impact on the business. The bottom line is, Craig, you know, during times of stress like that's when you need digital systems, cloud-based systems, software systems to help you with efficiency. The embrace of that in home health is incredible. With the census rates coming back, as patient flow does into nursing homes, we expect to achieve good organic growth of this business. That 14% trailing 24 months, we expect you know, really strong revenue growth ahead for this business. Thanks for the question, Craig. Thank you. Next question today is coming from Margaret Kaczor from William Blair. Your line is now live. Hey, good morning, guys. Thanks for taking the question. Just wanted to kinda think how this fits into your broader strategy within Europe, right? We're thinking about this business as a German-based business as we should. Could this help accelerate some of your processes as you try to move into other countries like France, like a U.K. or others? The regulatory system is just different enough where maybe it's still too hard? Have they thought about that, I guess? Thanks. Yeah. Thanks, Margaret. That's. It's a great question, and welcome back, by the way. Look, this does fit into our broader strategy globally and in Europe and in SaaS. It sort of, you know, it meets all three of those. I'll walk through a little bit of its work in Germany. Some of the folks, analysts already on the sell side have looked at this and said, "Hey, there could be an implication to this part of the ventilation business or this part of the CPAP business or this part of the APAP business and this part of the chronic care disease management business," which is all of us in Germany, outpatient care, out-of-hospital care, have been really focused on what that return looks like. I wanna be clear, though, the financials return that we're getting from here is this entity on its own. This entity on its own can achieve all the financial return that we want. Any of these synergies that could potentially be there are truly upside. I actually... The team, you know, put them into the model. I said, "Take them out and rerun the numbers." 'Cause I like saying, "Great, that's there." I see Hemanth Reddy smiling on our Zoom link here because look, you know, Katrin and team, you know, Katrin and Bobby are gonna work very closely on this. This is gonna report through our SaaS line globally. Bobby Ghoshal, the president of our SaaS division, will be in charge of the sort of the P&L. Katrin is gonna be on the board with Bobby Ghoshal and Rob and me to aim to be watching this entity and making sure that our three businesses, if you like, our German healthcare business, which is our fully integrated business all the way through to patients and insurance companies. Our German dealer business, where we sell sort of in a co-opetition way to other, home care providers, and then our German SaaS business, that they're all partnered together. Katrin's done an amazing job these last three, four, five years of putting together our dealer business and our healthcare business. I think, Katrin and Bobby together, with part of our global strategy, are gonna do an amazing job bringing together synergies and capabilities of that. But to the second part of your question, which is broader, not just around Germany and integration across those three businesses there is, hey, is this a sort of beachhead for further SaaS growth in Europe? Well, look, it's our first foray. As you know, Margaret, we don't signal future M&A. We didn't signal this before, and we don't plan to do that in detail. I will tell you that this is a scarce asset. We've been looking at it for a number of years to find MEDIFOX DAN, and we're really excited to have it part of our portfolio. We do have other opportunities on our radar screen. I think we're gonna be laser-focused right now on the integration of MEDIFOX DAN, getting all the return that we're focused on here and we've talked about on this call. Thanks for the question, Margaret. It's linked to our German strategy, it's linked to our European strategy, and it's linked to our global strategy, both in our sleep and respiratory care business and in our SaaS business. Thank you. Our next question is coming from David Low from JP Morgan. Your line is now live. Thanks very much. Mick, just to be clear on that, you're saying that this business is purely in Germany today, and this business, per se, couldn't expand into other European country markets as it stands, and we shouldn't expect that? Yeah. David, it's a good clarification question. Yeah, I mean, we've owned Brightree since 2016, and I've been asked multiple times by sell-side and buy-side, and actually sometimes in our own teams, we have these little Venturethon projects that lead to amazing innovations in our business, new businesses and integration. One of those Venturethon said, "Hey, why don't we just copy and paste Brightree into Germany?" Obvious, right? You run a home care business there and just translate all the Brightree code into German. We did experiment with some elements of that, and it's just so complicated and so different to just copy and paste Brightree into Germany. The good news is that's a moat around the MEDIFOX DAN business. It's very hard for a U.S. player to just come and, "Oh, we'll just copy and paste my code into Germany." It's actually virtually impossible to do that. You really have to think with the local regulations. When I say this is a beachhead to our SaaS play in Europe, it's not that we're gonna copy and paste the MEDIFOX DAN code right next door into France and say, "Hey, Lucile, here comes the copied and paste translated from German to French business." What we will learn is about GDPR. You know, we will learn about German privacy. We'll also learn about European privacy. We'll learn about German security. We'll also learn about European security. We'll learn about norms of European doctors. You know, when I go to the European Respiratory Society, it's not like there's a cohort of the European and the North American pulmonary and critical care medicine doctors, but there is a little bit of a cohort of European and things. They do think similarly in Germany and France and Northern Europe and Western Europe about many issues of clinical care and how to do it. That's what these software platforms do, which is help with clinical care, help with billing and help with integration and so on. Just to be clear, the short answer to your question is no, it's not a copy and paste from Germany and France. Yes, there's a lot of learning we're gonna get by running European SaaS at scale, and that will help us get management skills, technology skills, regulatory skills, privacy skills, that we can as a management entity bring into to future acquisitions and or organic growth plays in the other large European markets, France, you know, Northern Europe and other parts of Southern and Western Europe. Great question, David. Thank you. All right. Thank you. Thank you. Next question is coming from Matthew Mishan from KeyBank. Your line is now live. Hey, good morning or good afternoon, depending on time where everybody's at. Hey, just Mick, why is this a scarce asset? I just wanted to follow up on that comment. Is it scarce because of its competitive position, its scale, or there's the lack of availability of other things that might come up for sale? All of the above, Matt. You know, in the US, there's been a lot of innovation, a lot of small startups that have sort of built up over time. You know, we're the only large strategic entity. There are a number of other players sort of doing roll-ups of some of the out-of-hospital SaaS plays. It's been over sort of the last 10, 15, 20 years that innovation has sort of come through. When we talk about changes, you know, in French reimbursement around digital health, that was only like three, four, five years ago that the French authority changed digital health play for our core sleep apnea business. These deeper and deeper changes in the German digital health just went through 12 months ago. Europe tends to follow that, right? The analysis of the government and then changes. You know, working with industry, we've been you know. I mean, we were very strong in working with the French government around those changes a number of years ago. We were working with the German government and are working with the German government with organic plays in our core business and partnership plays with other startups and working you know very strongly here with integration now of MEDIFOX DAN to achieve that. It's a scarce asset because yeah it's a competitive positioning. It's. The regulatory wasn't there, the reimbursement wasn't there. You know, although there is a good sort of Munich and Paris and London-based entrepreneurship approach, it's not quite the same environment. The access to venture capital, the access to private equity, the access to innovation equity is not quite as prevalent in Europe as it is in the US, and I think that's some of it. Look, those are the answers I've been giving the last six years as to why ResMed's not in Europe. There's just scarce assets. We can't find them. Now we found one, and we're gonna integrate it, and we'll continue producing tremendous momentum growth of top line and bottom line. As we get comfortable with doing that, we'll be more comfortable to have our own team be entrepreneurial and start-up capabilities in other parts of Europe to create a scarce asset organically, which is the best way to do it, through our 7%-8% in R&D. We'll also keep our dry powder for other acquisitions that may make sense over time in large markets. Today we're laser-focused here on MEDIFOX DAN. Thanks for the question, Matt. Thank you. Next question today is coming from Suraj Kalia from Oppenheimer. Your line is now live. Hi. Hi, Mick, everyone. Hope everyone is safe and healthy. Hey, Mick, can you compare and contrast your ROI realized for Brightree and expected ROI for MEDIFOX DAN? You know, maybe from a perspective of TAM, sustainability of growth, just trying to understand the timing and the price paid for MEDIFOX DAN. Thank you. Yeah, thanks, Suraj, and hope you're doing well as well. Hemant, I'll hand over to you to walk through, you know, compare and contrast with Brightree. I'll say at a strategic level that I look on this as seminal as an acquisition as Brightree was. You know, in 2016, ResMed had a really strong digital health business, but it was really a cost center, if you like. At the time, we used to call it healthcare informatics. We didn't even call it digital health. But it was sort of software empowering through AirView and myAir, sales really, and growth and value of our core sleep apnea device and ventilator device and mask revenue. When we made that acquisition in 2016, I remember this exact same call six years ago. People were like, "Wait, you're in software, you know, embedded in the device and cloud around device. This is sort of what are you doing with this profitable software?" I said, "Well, software as a service and the profitable side with Brightree is great, and we've had a 5-year partnership." Actually, at the time, 7-year partnership with Brightree. Actually, at the time, we're buying marketing data from Brightree, so we'll save that cost out the gate, number one, synergy. But more important than that, we'll get to intimately know the business of out-of-hospital healthcare providers, which is the future of medicine and the future of healthcare. It's where ResMed's placing its bets, 95% of our revenue and profit. 99.5%+ of our investments are in that space. As you look over the last six years, I think we've had incredible return. When we made the acquisition of Brightree, it was $800 million, and it was about 10% of our market cap. I think on the day it was around $8 billion market cap. People were saying, "Look, you're betting 10% of the farm. There's a big bet on a, on a new area." I think six years later, most people would say that's been an incredible return. If you look at that Brightree business now, we've grown to around $30 billion market cap ± $2 billion, depending on the market today. Haven't looked. $30 billion market cap. Could I sell Brightree today for $3 billion? Absolutely. Would I? Absolutely not. The learnings have been amazing in our core business and the obviously on the front end, we've got a firewall, the commercial teams and the sales teams and operations teams. But what we've got on the back end is knowledge of software development, AI, ML, data analytics, cloud compute, the ability to manage privacy and cybersecurity at levels that we just couldn't have imagined in having a profitable SaaS business as part of our portfolio. I look on this, Suraj, compare and contrast for me at the strategic level that MEDIFOX DAN is just as seminal. It's a total sister company to MatrixCare and a very close cousin to Brightree. The new part of it, like Brightree was our new play into SaaS, this is a new play into SaaS in Europe at scale. As I said, there's a lot of startups, and it's easy to have a startup that loses money. There's lots of startups in Europe losing money around this. This is not only growth accretive on revenue for our SaaS business, it's accretive at EPS on a non-GAAP basis day one. That's why it's a great addition to our portfolio. I don't know. That's the sort of strategic compare and contrast. Hemant, any further detail on the strategy and/or the financials to Suraj's question? Yeah, happy to add to that, Mick. Suraj, the way we think about it is we think we can earn a very healthy return on this particular acquisition, and it's really driven by a few key things. One is the strong tailwinds in the market, right? So you've got an aging population in Germany that continues to grow much faster than the overall population. The expectation is by 2040, over 25% of the population will be over 65, right? So that population will continue to need care, and the care segment will continue to grow very dramatically. Second, just given the very acute labor shortages in the marketplace, as Bobby touched on earlier, the adoption of technology is going to be critical to bridging the gap between the growing need for care and the chronic labor shortage. MEDIFOX DAN is incredibly well-positioned to play that role, to help care for even more individuals. You know, currently across the market in Germany, there's 1 million folks who get cared for in facilities, 1 million folks who get professional care in their homes. That in-market is only gonna grow, and it's gonna grow at a very strong rate. MEDIFOX DAN has a strong track record of growing much faster than the market. Combination of strong innovation, strong commercial execution, a few targeted bolt-ons, and great growth with customers through, you know, increasing software adoption, module innovation, and the like. They're incredibly well-positioned to continue to grow strong double digits much faster than the market. Then the third reason why we believe we can earn a strong return on the acquisition is because of the value that ResMed can bring to MEDIFOX DAN. Jointly, we can accelerate MEDIFOX DAN's journey towards digitizing the care segment in Germany. We bring tremendous capabilities in terms of privacy, InfoSec, scale, in terms of infrastructure, operating at scale across the GDPR environments, cloud-based capabilities, AI ML capabilities, big data capabilities. All of that will just be a turbocharger to drive MEDIFOX DAN's growth across, and value creation, across the tremendous market opportunity that it has. You know, I think, you know, hard to give specific numbers, but we feel very comfortable that at the valuation that we've paid for the acquisition or will pay for the acquisition, we can earn a very strong return. Thank you. Next question is coming from Mike Matson from Needham & Company. Your line is now live. Yeah, thanks. Just first, the I have two questions, I guess. Interest rate you're expecting on this line of credit and will it be 100% finance? Then the second question is just the business that you're acquiring, this MEDIFOX DAN company, it says it has 600 employees. That seems pretty high for a company with $83 million in revenue. Looks like about 140,000 revenue per employee, and I think ResMed's kind of around about 450,000 revenue per employee. I guess I'm a little confused how they're so profitable with that many employees, but maybe it's because it's a software company, I don't know. Yeah. I'll answer the second part first, Mike, and then maybe, Hemant, you can go into the details of the interest rate on the credit we're using for this or the partial, right? We've got cash and debt we're using and the return that we're looking for that. To the second part of your question first, Mike. Yeah, you nailed it with your maybe it's, which is that, software companies have a different approach on this. If you go back and look at the 8-K when we bought Brightree and the MatrixCare side, there's, you know, a lot of software teams needed to get this going. You know, in our core business of sleep apnea, we have, you know, we produce a couple million, you know, 2 million devices a year and 15 million masks a year. We've got incredible scale out of the biggest manufacturing plant in the world in this field of respiratory medicine in Tuas in Singapore. We've just got incredible number one position in revenue growth, profitability, and capability. We've been in that space for 33 years. Look, in the software parts of even our core business, running the embedded software or the cloud software for our business, you know, those are important investments. If you look at the revenue per employee just in the tech side of our businesses, it's not that dissimilar to MEDIFOX DAN. You nailed it with the last part of your question, which is, hey, but they're profitable with that, and they really are. You know, I look on these 600 MEDIFOX DAN employees as now ResMedians. You know, as soon as this transaction closes, they're part of the ResMed family. Christian and Thorsten, the leaders, the Co-CEOs, but then all the way down through the organization, they're gonna become part of ResMed. They're innovative, and they're growing, and they're profitable. We look forward to investing together with them and through them to maintain this great growth momentum in both revenue and profit that we're achieving. Hemanth, I'll hand back to you for the first part of the question around the interest rate and the return we're expecting from the financing of this transaction. Sure. Just a couple of points there. The first is, you know, we currently have about $200 million of cash on our balance sheet, and by the time the transaction closes, we expect to generate some more cash, just given the strong cash flow generation profile of our core ResMed business. All that to say the consideration will be paid for by a combination of cash on hand and our credit facility. That's point one. Point two is all our existing credit facilities, as we've disclosed in our public documents, they're floating rate arrangements, and, you know, should be low single digits in terms of interest rates. You know, the new revolver will be, you know, about 90-100 basis points, so above LIBOR. that kind of interest rate target is what we're looking at. It should sort of, you know, it starts low and ticks up slightly over time, but all in low single digits. Thank you. Next question is coming from Dan Hurren from MST Marquee. Your line is now live. Oh, good morning. Mick, I get your point, that MEDIFOX DAN works as a standalone business and as a companion to your strategies. By coincidence, I'm actually here in Germany at the moment, and we've been talking to hospitals and sleep labs, and there's a very clear shift away from inpatient care from payers for everything, including your core business. I was hoping you might be able to expand on what you started on before and explain any interaction that MEDIFOX DAN has with your existing channel and channel partners. Well, Dan, I was gonna say good morning to you, and thank you for being up at 1:45 A.M. your time, but I don't have to say that 'cause you're ahead of me. You're in the afternoon there in Germany, in Europe. Look, this does make sense as a standalone business, and that's what I, you know, wanna be really clear on, that our return comes from that. But I'm not. Despite the fact that I had the team take out those synergies, to make sure this made sense without them, those synergies are there back to the core business, and there are some really exciting plays. Your statement is correct. The German government, like frankly, every government around the world, doesn't like, in the US, I think we're 18%-19% of the GDP is spent on a sick care system, most of it. 80% of it goes to inpatient, frequent flyers in the ICU, CCU, emergency room, back out and come back soon, you know, COPD patient, heart failure patient, diabetes patient, sleep apnea patient. It's just not sustainable, to grow your sick care spend, faster than the GDP. You know, Germany along with France and all of Western Europe and Northern Europe, frankly, have recognized that they need to move to more of outpatient care, and that does create huge tailwinds for the MEDIFOX DAN core business, but also for the interaction with our core business, and they're very much related. You know, those 8,000 customers, we know many of them. You know, Katrin Pucknat has interactions with many of them. And certainly the 300,000 caregivers, they know about ResMed. They know we're the number one brand for respiratory medicine. And with MEDIFOX DAN, we'll now be the number one brand for residential medicine in home health and nursing homes in Germany now, the way we are in the U.S. through MatrixCare. There'll be a lot of interactions and capability. Out the gate, the integration's gonna focus on getting the value from this acquisition, driving it forward. Certainly having those tailwinds behind our core business of the move from inpatient to outpatient, the move from high cost, high acuity to low cost, low acuity. Those are there. They've always been there for our core business. I think today, with the data we have, look at the ALASKA study, that we partnered with the French government to overlap our 11.5 billion nights of data with the French Sécurité sociale government-run systems and de-identified, private, secure data. We're able to prove a 39% mortality reduction, which is great for the population, the citizens of France. We're also able to show double-digit reductions in hospitalizations. You know, that sort of 20%-25% reduction in hospitalization costs is huge for a Western European government. The German government's not ignoring the data coming over from France in terms of chronic disease management for respiratory medicine. We're taking those data to Berlin and to Munich and to all of the different states in Germany, and we have really intimate relationships with the payers there through our strong interactions. Yes, it is great as a standalone business, but I don't wanna walk through all those other synergies now 'cause I feel like it's promising before we get there. We'll give you updates. This won't be the last time we talk about MEDIFOX DAN. We'll give you updates, you know, as it becomes part of our core business. Hopefully in two quarters, I'll be talking in the January, February call about our first quarter of success with MEDIFOX DAN and how those synergies are starting to come to play and what the path will be over the coming one, three, five years. A lot of upside in this, Dan, and thank you for doing that diligence in Europe to see that the trend is real and it's the momentum of move from inpatient to outpatient is only gonna accelerate as governments try to save money and improve outcomes for their citizens. Thank you. Our next question is coming from Lyanne Harrison from Bank of America. Your line is now live. Good morning, Mike. Just to clarify that, you mentioned the synergies. Is it right that, you know, the numbers that you're running in terms of the transaction being EPS accretive assumes that there's no revenue or cost synergies, currently or at the moment that gets factored into your model? If so, could you give us a little bit more color as to what that might be from a quantum perspective? Yeah, absolutely. The second part of your question is easy. It's 1-2 pennies, $0.01-$0.02 per quarter. Thank you, Amy. $0.01-$0.02 per quarter. That starts on day one. Yeah. No, look, I really did push the team. I said, "I don't wanna see the synergies built into the core model." That's not part of the core model of that accretion that's coming out the gate. Any of those synergies that come into play. The team wanna start on those on day one, but I wanna get the integration moving on day one and then have the synergies follow naturally. Because I think customers are actually gonna follow us down the path, and it's a whole lot better for a customer to tell you about the idea of how you can save them money from the "Here I am in my ivory tower. Here's how you can save money" home care provider, nursing home provider, home health provider in Munich or North Rhine-Westphalia. I am really excited about that 1-2 pennies a quarter out the gate is gonna be fantastic for us for our financial return. More important, as those synergies come into play, it'll be a positive momentum play that'll make that sort of sustainable profit generation from this entity as a standalone and as an integrated part of our global SaaS business. They'll be learning, as Bobby said earlier, from MEDIFOX DAN that'll go into Brightree, that'll go into MatrixCare. Learning from MatrixCare that'll come over to MEDIFOX DAN and then learning across the board of managing, you know, a half billion-dollar business almost now, what we can do on cloud compute, on privacy, cyber security, and so on. Really excited about the EPS accretive non-GAAP out the gate, but very excited about those synergies long term. Just not gonna overpromise here on the opening call. We just got this. It's a great entity. I'm really excited about it. Let's integrate it. Let's close it. Second, you know, get the regulatory over the line. Then let's integrate it, and then let's drive synergy. It'll be in that order, Lyanne. Thank you for asking a question at 1:50 A.M. your time. I think we have one more question. Actually, we've reached the end of our question and answer session. I'd like to turn the floor back over to you, Mike, for any further closing comments. Great, Kevin. Well, thanks a lot for that. Thanks to all of the shareholders who've and stakeholders who've joined us on this call today, to give you some color and clarity around the MEDIFOX DAN acquisition. I'd like to say thanks to Christian and Thorsten, the Co-CEOs of MEDIFOX DAN, and the whole team, all 600 of you. If you're listening to this call or reading the transcript, you're now ResMedians, well, as soon as this closes on regulatory, and we can't wait to have you be part of an entity that's gonna help a quarter of a billion people sleep better, breathe better, and live exceptionally better lives in out-of-hospital care with digital health and software. Thanks to all, and we'll give you an update on our earnings call in about two months from now. With that, Amy, I'll hand over to you to close out the call. Yeah. Awesome. Thanks, Mick. Thank you everyone again for joining us today. As a reminder, if you have any additional questions, please don't hesitate to reach out to Investor Relations. The webcast replay as well as the telephone replay available, will be available in about two hours on our website. With that, Kevin, you can now close out the call. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.