ResMed Maps Q4 2026 Acquisition Funnel Focused on ROI and Post-Close Accountability

ResMed’s acquisition “funnel” and evaluation framework (M&A approach)

ResMed did not describe a formal, step-by-step “funnel” diagram in the excerpts, but management did outline (i) how they size/qualify deals, (ii) what metrics they use to evaluate ROI, and (iii) how they ensure post-acquisition accountability—which together function as their practical acquisition funnel.

1) “Funnel” stages implied by management

A. Screen for strategic fit and portfolio role (“tuck-in”)

ResMed frames its acquisition focus as tuck-in acquisitions that fit into the existing portfolio and go beyond pure strategic fit by also offering growth opportunity. ¹ ResMed also highlights an integration/expansion pattern in prior tuck-ins—for example, Snap Technologies initially acquired as a tuck-in to Brightree, then expanded to broader functionality (including supporting HME customers not on Brightree ERP and working with “anyone’s ERP”). ² That suggests a funnel stage where management evaluates not just whether the product fits, but whether it can be leveraged through ResMed’s commercial and technology footprint. ²³

B. Deal size screen (“ring-fence” size)

ResMed indicates it is looking at deals in the $100 million to $500 million range. ³ Management describes these as tuck-in acquisitions and notes the framing “for a $30+ billion company.” ³ This is a clear “size gate” consistent with the question about “ring-fencing” deal size. ³

C. Quantitative ROI hurdle: ROI relative to cost of capital and short timeframe

ResMed states it will evaluate acquisitions using “multiple metrics” including ROI over WACC over a short period of time. ¹ That functions as the core quantitative hurdle in their funnel: once a target clears strategic fit and size, it must still clear ROI/WACC timing requirements. ¹

D. Post-close accountability: performance tracking vs expectations

ResMed emphasizes delivery accountability after acquisition, and specifically mentions they will monitor outcomes because acquisitions can be performing above expectations, meeting, or not. ¹ This implies a funnel stage that includes ongoing KPI monitoring and expectation management after closing. ¹

2) What metrics and evaluation criteria are explicitly stated

Based on management’s remarks, the explicit evaluation criteria include:

• ROI vs WACC on a short-period basis. ¹
• Multiple metrics beyond ROI/WACC (management says “multiple metrics,” though only ROI/WACC over time is specified in the excerpt). ¹
• Strategic fit plus growth opportunity within the portfolio context. ¹
• Accountability and measured post-acquisition performance relative to expectations. ¹

3) Examples of targets they referenced (to illustrate what “passes the funnel”)

ResMed gave “broad overviews” of companies on its radar (without detailed disclosure). ³ The examples also help interpret their funnel:

• Noctrix: described as an innovation med-tech opportunity with sleep physician prescription flows through DME/HME/VA channels, and management believes ResMed would be a “better owner” leveraging commercial infrastructure and technology/marketing to accelerate growth. ³ (This illustrates the “strategic fit + growth leverage” gate.) ³
• VirtuOx: described as home sleep apnea testing and framed as part of an end-to-end pathway from screening/awareness to diagnosis and management. ³ (This illustrates the funnel stage of “portfolio pathway expansion.”) ³
• Additionally, ResMed mentioned acquisition/integration experience via Snap Technologies and its ability to expand beyond the initial platform (Brightree) to additional ERP contexts and customer types. ² (This illustrates the “tuck-in that can expand” pattern.) ²

4) How capital allocation and ROI discipline connect to M&A

In the capital allocation discussion, ResMed said it would use a disciplined approach to capital allocation where the first priority is reinvesting to drive growth, and it will also evaluate M&A opportunities specifically in spaces with sustainable competitive advantages and attractive long-term growth. ⁴ This frames M&A as part of a broader capital allocation funnel, not an isolated strategy. ⁴

Bottom line

ResMed’s implied acquisition “funnel” (from screen to execution) is:

1. Size gate: focus on $100M–$500M “tuck-in” targets. ³
2. Strategic/portfolio gate: targets must fit the portfolio and offer growth opportunity, not just adjacency. ¹
3. Quant gate (ROI hurdle): acquisitions are evaluated using metrics including ROI over WACC over a short period of time. ¹
4. Execution gate (accountability): management monitors post-close performance because results vary (above expectations, meeting, or not). ¹

The excerpts also show management’s intent to pick deals that can be leveraged through ResMed’s existing commercial infrastructure (e.g., Noctrix) ³ and that extend the end-to-end sleep care pathway (e.g., VirtuOx). ³