This Home Medical Company Looks to Be Moving Fast — What's Next?

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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.

The home medical equipment industry is big.

Led by companies like Adapthealth AHCO, Apria Inc. APR, Viemed Healthcare Inc. VMD and Amedisys Inc. AMED, the industry brought in north of $30 billion in 2019, according to Allied Market Research. Allied projects the global industry to reach more than $56 billion by 2027, representing a healthy 6.1% compound annual growth rate (CAGR).

Quipt Home Medical Corp. QIPT QIPT is another player in the space that has been on the move with the acquisition of several companies in a short time.

1st Acquisition

The company announced it recently executed a nonbinding letter of intent to acquire an arm’s length private respiratory care company in the Midwest reporting unaudited, trailing 12-month annual revenue of approximately $13 million, $1.6 million in net income and positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). 

The target has a heavily weighted respiratory product mix, serving as a leader in the respiratory home-care services space for over 25 years in a major metropolitan hub within a Midwestern U.S. state. The target has several difficult-to-obtain insurance contracts and would significantly enhance Quipt’s presence in the Midwest with a new location, covering an entire service area of a major metro hub. The target would be expected to increase Quipt’s active patient count by more than 15,000, which would bring Quipt’s total to approximately 170,000 active patients. The target has a strong management team in place, and like Quipt, the target offers high-quality service, equipment and supplies.

Quipt expects the acquisition would increase its annual revenue by approximately $13 million and net income by $1.6 million. Leveraging existing infrastructure, Quipt would expect to achieve additional revenue generated from organic growth, cross-selling and corporate synergies.

2nd Acquisition

Quipt announced that it acquired a privately held biomedical services company with operations in the Southeastern United States, reporting unaudited, trailing 12-month annual revenue of approximately $1.5 million and $225,000 in net income.

The acquisition provides Quipt a synergistic opportunity to expand into a brand-new service line of biomedical repair services for respiratory equipment, including preventative maintenance. Quipt will be able to assist healthcare providers with improving the operational efficiency of their respiratory equipment programs. 

Under the terms of the definitive purchase agreement, Quipt acquired the biomedical services operation for approximately $700,000 in cash, and the acquisition is expected to increase Quipt’s annual revenue by approximately $1.5 million and net income by approximately $225,000.

3rd Acquisition

Quipt announced that it has executed a nonbinding letter of intent dated Nov. 22 to acquire a private respiratory care company serving 7 states throughout the U.S. reporting unaudited, trailing 12-month annual revenue of approximately $14 million, $1 million in net income and positive adjusted EBITDA.

The target specializes in providing high-quality, comprehensive respiratory care to patients in long-term care settings, including ventilator management, equipment, oxygen and providing supplies. The target provides these facilities with not only the necessary clinical personnel but also state-of-the-art respiratory tools and equipment, making it easy for them to care for patients with complex respiratory needs. The target also has a pulmonary rehabilitation service, which assists patients with an even wider variety of respiratory care issues. 

The acquisition is intended to increase Quipt’s annual revenue by approximately $14 million and $1 million in net income before synergies. Leveraging existing infrastructure, Quipt would expect to achieve additional revenue generated from organic growth, cross-selling and corporate synergies.

Looking Forward

Based on the current business, market trends and completed and prospective acquisitions, the company is expecting its run-rate revenue for the end of calendar 2022 to be $180 million to $190 million with $38 million to $43 million in adjusted EBITDA.

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. This content is for informational purposes only and not intended to be investing advice.

Posted In: Health CareSmall CapGeneralPartner ContentQuipt

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