Health tech giant Hillrom to acquire Seattle startup Bardy Diagnostics for $375M

Dr. Gust Bardy, founder of Bardy Diagnostics. (Bardy Photo)

Hillrom, a publicly-traded medical device and digital health company based in Chicago, will pay $375 million to acquire Seattle startup Bardy Diagnostics.

Founded in 2013, Bardy set out to change the way medical professionals monitor heart conditions with a non-invasive cardiac monitor patch that helps detect arrhythmia. The Carnation Ambulatory Monitor, or CAM for short, is designed to be worn comfortably for approximately a week, with the goal of improving patient compliance. It uses a unique circuit design and algorithms to process P-wave recording. Bardy claims that its device captures clearer and more accurate heart rhythms than competing electrocardiography (ECG) monitors.

The deal, expected to close in the second quarter, includes future potential payments if certain milestones are met. Bardy has annualized revenue of $30 million and net operating losses of more than $20 million, according to Hillrom’s press release.

Bardy’s has 230 employees based in the Seattle region; Houston; and New Providence, R.I. They will remain at their current locations following the acquisition.

The acquisition will add to Hillrom’s existing cardiology products including cardiac stress exercise, Holter, and resting ECG devices.

“This acquisition provides Hillrom with a highly strategic and differentiated diagnostic cardiology platform aligned with our vision of Advancing Connected Care™, as well as an attractive recurring, high-growth revenue stream and gross margin profile,” Hillrom President and CEO John Groetelaars said in a statement.

Bardy has raised more than $71 million, including a $35.5 million round in April 2019 led by River Cities Capital Fund. Other backers include HealthQuest Capital, Aperture Venture Partners, Aphelion Capital, Lumira Ventures, Rex Health Ventures, SV Health Investors, Health Enterprise Partners and Ascension Ventures.

Bardy won Hardware of the Year honors at the 2019 GeekWire Awards.

The startup was founded by Gust Bardy, a long-time cardiac electrophysiologist who also serves as a clinical professor of medicine, cardiology, at the University of Washington and is the director of the Seattle Institute for Cardiac Research. Bardy sold his previous company, Cameron Health, to Boston Scientific in 2012.

‘Our team coupled advanced diagnostics with comfort and ease-of-use for the patient, and simple implementation for clinicians,” Bardy said in a statement. “By joining Hillrom, we will broaden our footprint globally with the goal of providing greater patient value and more confident physician diagnoses.”

Founded in 1915, Hillrom originally sold hospital beds and medical devices but has expanded to software products and digital health-related services. It has more than 10,000 employees. The company’s stock price was up more than 2% on Tuesday, and has dropped slightly over the past year. Hillrom reported annual revenue of $2.88 billion for its fiscal 2020, down 1% year-over-year, and adjusted earnings per share of $5.53, up 9%.

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