Data Communications Management Corp DCMDF

RE:RE:RE:RE:RE:RE:RE:Clarus target raise on acquisition close - cantechletter.com

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Transaction Highlights

• Establishes Quipt as a leading respiratory-focused home medical equipment suppliers in the United States with significant scale, serving 270,000 patients with 32,500 referring physicians across 115 locations in 26 states.
• The combination of Quipt and Great Elm has a combined Annualized Revenue (defined below) and Annualized Adjusted EBITDA (defined below) of $220 million and $47 million, respectively, based on Quipt’s reported audited results for the fourth quarter ended September 30, 2022 and Great Elm’s unaudited results for the 12 months ended August 31, 2022.
• Pursuant to the membership interest purchase agreement dated January 3, 2022, the total purchase price is $80 million (subject to customary adjustments of Great Elm’s working capital, existing debt and expenses), comprised of $73 million in cash, $5 million in assumed debt, and 431,996 Quipt common shares at a deemed price per share equal to $4.63, representing a purchase price of 6.0x Adjusted EBITDA pre cost savings and synergies.
• Quipt has identified $2 million in cost savings and synergies, which is expected to be captured over the first six months and is expected to result in Great Elm’s Anticipated Annualized Adjusted EBITDA (defined below) of $15 million, representing a purchase price of 5.2x Adjusted EBITDA post cost savings and synergies. The Anticipated Annualized Adjusted EBITDA is $49 million for Quipt.
• Post-Acquisition, Quipt’s Recurring Revenue (defined below) are expected to increase from 77% for the fiscal year ended September 30, 2022, to 82%, on a pro forma basis.
• Quipt to drawdown a total of $73 million from its $110 million senior secured credit facility (announced on September 19, 2022), maintaining a conservative balance sheet with net debt to Adjusted EBITDA of 1.96x on a pro forma basis.
• Expected to be financially accretive to overall growth and cash flow.
• Adds tremendous cross-selling opportunities in which Quipt may sell products in Great Elm locations, including ventilation and oxygen.
• Adds significant opportunity to increase resupply revenue and margins once Great Elm’s sleep patients are onboarded to Quipt’s resupply program.
• Great Elm's footprint is expected to create additional opportunities to expand Quipt’s access for accretive tuck-in acquisitions.
• The combination of two leading clinical respiratory providers is expected to enhance Quipt’s patient-centric ecosystem across the entire company by further collaborating with key sales touchpoints, including healthcare providers like hospitals, doctors, rehab centres, and long-term care facilities.
• With this Acquisition Quipt successfully surpasses its previously announced outlook of achieving Annualized ‎Revenue by the end of calendar 2022 (Q1 2023) of $180-$190 million.‎

https://www.globenewswire.com/news-release/2023/01/03/2582532/0/en/Quipt-Acquires-60-Million-in-Revenues-and-13-Million-Adjusted-EBITDA-with-Strategic-Acquisition-of-Great-Elm-Healthcare-LLC.html