Pandemic Spurs Growth in Home Medical Equipment Market — Is This Company a Way to Trade It?

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Photo by Mockup Graphics on Unsplash

Lockdowns that prevented people from leaving their homes during the COVID-19 pandemic led to a surge in demand for home medical equipment. 

The U.S. home medical equipment market was $56.1 billion in 2021 and is expected to reach $84.4 billion by 2028, growing at a compound annual growth rate (CAGR) of 6% from 2021 to 2028, according to a report published in April by Grandview Research. 

Even without the pandemic, the home medical equipment market was on the rise — largely because of the surge in chronic diseases such as diabetes and respiratory conditions. Technological advancements in-home medical equipment and the increase in the geriatric population also are contributing to the growth of the market, with massive companies like Medtronic PLC MDT and Johnson & Johnson JNJ often moving toward investing more in the sector.

One company that’s poised to capitalize on the growth of the home medical device market is Quipt Home Medical Corp. QIPT, which focuses on respiratory care equipment.

The respiratory device market is expected to reach $29.9 billion by 2025, up from $16 billion in 2019, according to a report by market research firm MarketsandMarkets. Quipt is a leader in providing respiratory care devices through its network of more than 19,000 referring physicians worldwide and the delivery of nearly 250,000 pieces each year. 

Quipt’s offerings include daily ambulatory aids, respiratory equipment rental, home ventilator equipment, oxygen therapy and sleep apnea, and positive air pressure (PAP) treatment. 

A Breathing Business

To keep its market advantage, one of Quipt’s strategies is acquisitions of other companies to boost its existing operations. 

In July, Quipt announced that it had acquired 3 separate entities with operations in California, Missouri, Arkansas, and Mississippi, reporting combined annual revenue of about $5.5 million. 

“We are excited to build our brand into local markets dedicated to exceptional patient care and expect a smooth integration process that will allow us to move quickly to capture the many synergies available to us,” Quipt Chairman and CEO Greg Crawford said at the time of the announcement. “We are able to add 6 new locations, over 10,000 active patients, and $5.5 million in gross revenue through these acquired entities providing us meaningful infrastructure in these new areas of service.”

In August, Quipt announced it had acquired a business with operations in Missouri that will give it 15,000 patients, 1,500 unique referring physicians, insurance contracts, and decades of operating experience in the markets it serves. The latest acquisition gives Quipt the ability to quickly expand on the Missouri business it acquired in July. 

“We continue to focus on strategic acquisitions that help to build our footprint across the United States,” Crawford said. “The acquisition significantly strengthens our overall interconnected healthcare network, and the fast-paced expansion in Missouri will serve as a foundation for other new states where we can grow through economical bolt-on acquisitions that provide us important insurance contracts.”

Additionally, Quipt just completed another crucial acquisition of a business with operations in Mississippi, further boosting its geographic footprint. Notably, this adds 2 locations (now at 62), and 4,000 active patients (now at 150,000), as well as ~600 unique referring physicians (now at 19,000). 

The acquired company has reported unaudited trailing 12-month annual revenues of approximately $2.7 million. Post integration, Quipt expects an Adjusted EBITDA for the acquisition target of $0.5 million. 

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. The content that follows is for informational purposes only and not intended to be investing advice.

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