Skylight Health Group Inc SLHG has agreed to acquire NeighborMD (NMD) for $8 million.
Skylight has also arranged a $20 million debt line facility with a New York-based credit lender.
The facility's terms will allow the company to draw down $10 million to fund the NMD acquisition. As of 31 December 2021, Skylight held a cash balance of $11.7 million.
Why It Is Important: NMD operates nine owned practices offering primary care services to over 5,000 lives. NMD has over 1,100 Medicare Advantage (MA) lives in full-risk contracts with Humana Inc HUM and CarePlus, in Florida.
In addition, NMD provides complete management services for over 1,400 additional MA lives through its affiliated providers and practices.
Of the Medicare Advantage lives at full risk, NMD sees an average reimbursement of $10,000 to $12,000 per member/per year.
NMD generates annual sales of $35 million. While NMD has not yet generated profitability, with its scale combined with Skylight and planned initiatives, it is expected to become profitable this year.
The expected expansion of the risk contracts to existing Skylight practices in Florida represents a significant organic growth opportunity.
Price Action: SLHG shares closed 10.6% higher at $1.04 on Monday.
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