Masimo (MASI) Gets New Suitors for Its Consumer Business Sale

Masimo's Consumer Business Separation - Masimo has received unsolicited inbound requests from several entities to acquire its consumer audio business following the expiry of the exclusivity period for a potential joint venture [1] - In May, Masimo entered into a non-binding term sheet to sell the majority stake in its consumer audio and consumer health businesses for $850-$950 million on a cash and debt-free basis [2] - The current term sheet offer is lower than the acquisition price paid by Masimo, implying a potential loss for shareholders [3] - Masimo may separate its business through a joint venture, spin-off, or complete sale of the consumer audio business, while retaining its professional healthcare and telehealth/telemonitoring products [4] - Masimo paid over $1 billion to acquire Viper Holdings Corporation in 2022, adding the consumer business to its portfolio [6] - Activist investor Politan Capital has been pressuring for the separation of the consumer business and is concerned about the transfer of IP rights [7] - Masimo will choose the separation path based on the unanimous decision of its board of directors, aiming to meet its long-term goal of$8 earnings per share in five years [8] Masimo's Financial Performance and Industry Comparison - Masimo's shares have risen 5.3% year to date, compared to the industry's 7.2% growth and the S&P 500's 16.5% increase [4] Masimo's Product Portfolio Expansion - Masimo received FDA 510(k) clearance for its W1 medical watch, which can be integrated with the Masimo SafetyNet telemonitoring solution [9] - Masimo announced Sleep Halo, a new feature for its W1 Sport wearable, offering overnight sleep data tracking with over 70,000 daily measurements [10] Other Top-Ranked Medical Stocks - DaVita (DVA) has an estimated long-term growth rate of 17.5%, with earnings surpassing estimates in each of the trailing four quarters and shares rising 43.4% year to date [12] - Aspen Technology (AZPN) has an estimated long-term growth rate of 13.1%, with earnings surpassing estimates in two of the trailing four quarters and shares losing 4.2% year to date [12][13] - Universal Health Services (UHS) has an estimated long-term growth rate of 19%, with earnings surpassing estimates in each of the trailing four quarters and shares rising 48.6% year to date [13]