RADNOR, Pa., Dec. 3, 2018 /PRNewswire/ -- Safeguard
Scientifics, Inc. (NYSE:SFE) (Safeguard or the Company) today
announced that its partner company, Propeller Health, signed a
definitive agreement to be acquired by ResMed (NYSE:RMD) (ASX:RMD)
for $225 million in cash. The
transaction is expected to close by end of March 2019, pending satisfactory completion of
customary closing conditions and regulatory approval. Safeguard
expects to receive cash proceeds of $41.4
million, which excludes an amount of additional proceeds to
be held in escrow, representing an approximate 3x cash-on-cash
return and 34% IRR. Safeguard deployed $14.3
million in Propeller since August
2014 and has a 20% primary ownership position.
"At Safeguard, we were early believers that digital technology
would reshape healthcare," said Gary J.
Kurtzman, MD, Managing Director at Safeguard and Board
Member at Propeller Health. "This acquisition is not only a
validation of that belief, but it is significant as it demonstrates
that digital therapeutics have entered the mainstream of patient
care. We are proud to have been a part of the Propeller
journey and excited for the exceptional team as they extend and
expand the platform as part of ResMed."
"Safeguard continues to make steady progress in our ongoing
efforts to support the growth of and monetize our portfolio of
partner companies," said Brian J.
Sisko, Safeguard President and CEO. "Following the
close of the transaction, Safeguard will have received over
$120 million in cash proceeds related
to monetizations of our partner company interests since our
announced strategy change in January 2018." Mr. Sisko
re-iterated that, "the Safeguard team remains committed to
supporting our maturing portfolio, maximizing the overall value of
our partner company holdings and monetizing such holdings, in both
traditional and non-traditional ways, as opportunities arise."
About Propeller Health
Propeller Health is a leading
digital therapeutics company dedicated to the development and
commercialization of measurably better medicines. Propeller creates
products to more effectively treat chronic respiratory disease and
improve clinical outcomes for patients through connectivity,
analytics, and companion digital experiences. The Propeller
platform is used by patients, physicians and healthcare
organizations in the United
States, Europe and
Asia. For more information,
visit www.propellerhealth.com.
About Safeguard Scientifics
Historically, Safeguard
Scientifics (NYSE:SFE) has provided capital and relevant expertise
to fuel the growth of technology-driven businesses. Safeguard
has a distinguished track record of fostering innovation and
building market leaders that spans more than six decades. For
more information, please visit www.safeguard.com.
Forward-looking Statements
Except for the
historical information and discussions contained herein, statements
contained in this release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Our forward-looking statements are
subject to risks and uncertainties. Forward-looking
statements include, but are not limited to, statements regarding
Safeguard's initiatives taken or contemplated to enhance and unlock
value for all of its stockholders, Safeguard's efforts to execute
on and implement its strategy to streamline its organizational
structure, reduce its operating costs, pursue monetization
opportunities for partner companies and maximize the net proceeds
distributable to its shareholders, Safeguard's ability to create,
unlock, enhance and maximize shareholder value, Safeguard's ability
to have a smooth transition to a new management team, the timing of
Safeguard's management succession plan and its effect on driving
increased organizational effectiveness and efficiencies, the
ability of the new management team to execute Safeguard's strategy,
the availability of, the timing of, and the proceeds that may
ultimately be derived from the monetization of partner companies,
Safeguard's projections regarding the reduction in its ongoing
operating expenses, Safeguard's projections regarding annualized
operating expenses and expected severance expenses, monetization
opportunities for partner company interests, and the amount of net
proceeds from the monetization of partner company interests that
are ultimately distributable to Safeguard shareholders after
satisfying Safeguard's debt obligations and working capital needs
and the timing of such distributions. Such forward-looking
statements are not guarantees of future operational or financial
performance and are based on current expectations that involve a
number of uncertainties, risks and assumptions that are difficult
to predict. Therefore, actual outcomes and/or results may
differ materially from those expressed or implied by such
forward-looking statements. The risks and uncertainties that
could cause actual results to differ materially include, among
others, our ability to make good decisions about the monetization
of our partner companies for maximum value or at all and
distributions to our shareholders, our ability to successfully
execute on our strategy to streamline our organizational structure
and align our cost structure to increase shareholder value, whether
our strategy will better position us to focus our resources on the
highest-return opportunities and deliver enhanced shareholder
value, the ongoing support of our existing partner companies, the
fact that our partner companies may vary from period to period,
challenges to achieving liquidity from our partner company
holdings, fluctuations in the market prices of our publicly traded
partner company holdings, competition, our inability to obtain
maximum value for our partner company holdings, our ability to
attract and retain qualified employees, market valuations in
sectors in which our partner companies operate, our inability to
control our partner companies, our need to manage our assets to
avoid registration under the Investment Company Act of 1940, risks,
disruption, costs and uncertainty caused by or related to the
actions of activist shareholders, including that if individuals are
elected to our Board with a specific agenda, it may adversely
affect our ability to effectively implement our business strategy
and create value for our shareholders and perceived uncertainties
as to our future direction as a result of potential changes to the
composition of our Board may lead to the perception of a change in
the direction of our business, instability or a lack of continuity
that may adversely affect our business, and risks associated with
our partner companies, including the fact that most of our partner
companies have a limited operating history and a history of
operating losses, face intense competition and may never be
profitable, the effect of economic conditions in the business
sectors in which Safeguard's partner companies operate, and other
uncertainties described in our filings with the Securities and
Exchange Commission. Many of these factors are beyond the
Company's ability to predict or control. As a result of these
and other factors, the Company's past operational and financial
performance should not be relied on as an indication of future
performance. The Company does not assume any obligation to
update any forward-looking statements or other information
contained in this press release.
SAFEGUARD CONTACT:
John E.
Shave III, IRC
Senior Vice President, Investor Relations and Corporate
Communications
(610) 975-4952
shave@safeguard.com
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SOURCE Safeguard Scientifics, Inc.