Adds $13 Million in Annualized Revenue CINCINNATI, Jan. 04, 2022 (GLOBE NEWSWIRE) -- Quipt Home Medical Corp. (“Quipt” or the “Company”) (NASDAQ:QIPT; TSXV:QIPT), a U.S. based leader in the home medical equipment industry, focused on end-to-end respiratory care, is very pleased to announce that it has acquired At Home Health Equipment, Inc. (“At Home Health Equipment”), a business with operations in Indiana, reporting unaudited trailing 12-month annual revenues of approximately $13 million and $1.6 million in net income with anticipated Adjusted EBITDA (defined below) of $2.9 million (22% margin) post integration. As a reminder all figures stated are in USD.
Acquisition Details
The acquisition creates Quipt’s single largest market from a revenue standpoint, covering the entire coverage sphere of Indianapolis. At Home Health Equipment has been a leader in the respiratory home care services space for over 25 years and has several difficult to obtain insurance contracts that significantly enhance Quipt’s presence in the region. With a new location, covering an entire service area of Indianapolis, the acquisition adds to Quipt’s active patient count by over 15,000, bringing Quipt’s total to approximately 170,000 active patients. At Home Health Equipment has a strong management team in place, and like Quipt, offers high-quality service, equipment and supplies. The expansionary operating footprint aligns closely with regions that have a high prevalence of Chronic Obstructive Pulmonary Disease (“COPD”), a key target patient group; Indiana is among the highest prevalence U.S. States. According to the National Institutes of Health (NIH), about 443,000 people in Indiana have COPD.
Moreover, At Home Health Equipment has a strong revenue base, with over 30% stemming from exclusive contracts in the hospice segment, opening a new vertical for Quipt to strategically build throughout 2022. Additionally, there is solid diversification amongst referral sources, and a payor base, with exposure to less than 20% from Medicare. Furthermore, At Home Health Equipment does not have current exposure to ventilation therapy, providing Quipt a significant growth opportunity to introduce its clinical ventilation therapy program as well as complimentary clinical respiratory products and services. In addition, At Home Health Equipment provides Quipt the opportunity to add patients to Quipt’s existing subscription-based resupply program, and Quipt expects that it would derive strong revenue synergies from this initiative.
Under the terms of the definitive purchase agreement, Quipt acquired the business for approximately $13.1 million in cash. It is expected the acquisition will increase Quipt’s annual revenues by approximately $13 million, and, post integration, Adjusted EBITDA by $2.9 million (22% margin).
The non-binding letter of intent for the acquisition by Quipt of At Home Health Equipment was announced by Quipt on November 16, 2021.
Reiteration of Outlook for Calendar End 2022 (Fiscal Q1 2023)
As originally disclosed on November 16, 2021, based on the current operations, market trends and completed and prospective acquisitions, the Company is reiterating it outlook for its annual run-rate revenue by the end of calendar 2022 (Fiscal Q1 2023) to be $180-$190 million with $38-$43 million in Adjusted EBITDA.
Management Commentary
“This is a significant acquisition as it creates the largest single market for us in a very attractive region allowing us the ability to strengthen our overall interconnected healthcare network in the state of Indiana. Our operating engine and proven ability to integrate acquired assets allows us to continue the strong pace of closing larger strategic acquisitions during this exciting growth period,” said Greg Crawford, Chairman and CEO of Quipt. “This acquisition is very powerful as it services the significant metro hub of Indianapolis, and we plan on quickly integrating their business operations and leveraging Quipt’s payor contracts across our existing Midwest locations. We see a tremendous number of synergies and believe our strong sleep re-supply business presents us with significant upside as we deploy our technology therein. We have a goal of increasing overall efficiencies, as well as adding on our clinical ventilation therapy program as an extension to their existing respiratory product mix, representing an immediate cross selling opportunity for us. We are also excited to enter the hospice segment, with over 30% of At Home Health Equipment’s revenue coming from this high growth area and we will strategically work to build this vertical out over the course of 2022.”
Chief Financial Officer, Hardik Mehta added, “This acquisition allows us to build out our operating footprint as we reach 170,000 active patients, adds $13 million in revenue, a meaningful EBITDA and net income contribution as well as providing us significant infrastructure. This exciting respiratory care company strategically assists us in gaining market share in this favorable Midwest region, where there is a high prevalence of COPD patients and a significant opportunity to leverage our service intensive model. As we look to our strategic growth path, we continue to have an extremely deep pipeline, and expect to remain on an aggressive pace as we move through the first half of the year and are excited to execute on our vision for 2022.”
ABOUT QUIPT HOME MEDICAL CORP.
The Company provides in-home monitoring and disease management services including end-to-end respiratory solutions for patients in the United States healthcare market. It seeks to continue to expand its offerings to include the management of several chronic disease states focusing on patients with heart or pulmonary disease, sleep disorders, reduced mobility and other chronic health conditions. The primary business objective of the Company is to create shareholder value by offering a broader range of services to patients in need of in-home monitoring and chronic disease management. The Company’s organic growth strategy is to increase annual revenue per patient by offering multiple services to the same patient, consolidating the patient’s services, and making life easier for the patient.
www.Quipthomemedical.com
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