Buyer: Protech Home Medical
Seller: Protech Home Medical has acquired Mayhugh’s Medical Equipment
Sector: HME, Home Medical Equipment
Protech Home Medical has acquired Mayhugh’s Medical Equipment in Jacksonville, Fla., for $5.8 million.
- MME, which has trailing 12-month annual revenues of $7 million and adjusted EBIDTA of $1.2 million, is a respiratory focused provider with more than 10,000 active patients, including 5,000 that Protech can immediately add to its resupply program.
- The deal marks Protech’s first foray into Florida.
- $7 Million in Annualized Revenues, in Excess of 15% Adjusted EBITDA Margin and Increases Protech’s Active Patient Count by More Than 10,000
- 5,000 Patients to Immediately Enter Protech’s Subscription Re-Supply Platform
CINCINNATI, Feb. 02, 2021 — Protech Home Medical Corp. (“Protech” or the “Company”) (TSXV: PTQ), (OTCQX: PTQQF), a U.S. based leader in the home medical equipment industry, focused on end-to-end respiratory care, is pleased to announce that it has acquired Mayhugh’s Medical Equipment (“MME”), a company based in Florida, reporting unaudited trailing 12-month annual revenues of approximately $7 million, Adjusted EBITDA (defined below) of $1.2 million, and positive net income.
Excluding the impact of future acquisitions, and organic growth derived from continuing operations, we are pleased to share the following selected financial and operating metrics for Protech following the closing of the acquisition of MME:
Run-Rate Revenue of $130-$135 million;
Run-Rate Adjusted EBITDA of $26-$30 million;
120,000 current active patients;
17,000 unique referrals; and
49 locations across 11 U.S. States.
MME is a leader in the respiratory home care services industry in Northern Florida and will add over 10,000 active patients to Protech’s patient population. Furthermore, MME represents Protech’s entrance into its 11th U.S. State with its 49th location. MME gives Protech immediate access to Jacksonville, an attractive metro hub in which it will leverage its existing infrastructure to create significant cross selling and patient growth opportunities. The MME management team has successfully transitioned MME from a relatively small medical equipment company to a clinical respiratory company with its product mix at over 85% respiratory, possessing a large selection of respiratory and home medical equipment to meet the needs of today’s patients at home. The staff delivers on a high touch service model, aligned with Protech’s existing model, and is continually educating their patient base to ensure strong compliance of equipment. In addition, MME gives Protech the ability to immediately add over 5,000 patients from its patient base to Protech’s existing subscription-based resupply program and Protech expects to derive strong revenue synergies from this initiative.
MME has a diverse payor mix with no more than 50% coming from a particular payor source.
Under the terms of the definitive purchase agreement, Protech acquired MME for total consideration of approximately $5.8 million. Post integration, it is expected that MME will increase Protech’s annual revenues by approximately $7 million and Adjusted EBITDA by $1.4 to $1.8 million. Leveraging existing infrastructure and payor contracts, Protech expects to achieve additional revenue generated from organic growth, cross selling and corporate synergies.
“We are delighted to close on the acquisition of MME, which provides us with a solid foundation from which to grow in the State of Florida, representing a major milestone for our company,” said Greg Crawford, Chairman and CEO of Protech. “We are excited to add another turn-key respiratory home care operator to our family of companies, with MME being a logical fit for Protech. We expect a smooth integration process and will move quickly to capture the tremendous amount of synergies, beginning with adding 5,000 patients to our subscription re-supply model, which will provide an immediate revenue driver for us. MME is immediately accretive, similar to our deep pipeline of potential acquisition targets, which we expect to be very busy moving through the funnel in the months to come.”
Chief Financial Officer, Hardik Mehta added, “MME’s heavily weighted respiratory product mix, and diversification of the payor mix, provides Protech with a stable foundation to start its Florida operations. We are excited to have the opportunity to penetrate the attractive Jacksonville market and have already begun the integration process. We will look to grow our scale in Florida both organically and through strategic bolt-on opportunities that present themselves. We believe MME is just the beginning of what will be an aggressive acquisition pace for us over the remainder of 2021, including potential larger revenue opportunities as we look to accelerate our scale beyond the current run-rate revenue we have.”
ABOUT PROTECH 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.
Unless otherwise specified, all dollar amounts in this press release are expressed in Canadian dollars.
The healthcare and life sciences M&A markets were active in 2020 and transaction activity is robust and growing in 2021, even amid the COVID-19 pandemic. There is unprecedented capital in market, the lowest interest rates in US history and strong acquirer motivations for high quality healthcare companies. Across the continuum of care, buyers and investors are looking for well established, profitable businesses and offering strong valuations and options for management.
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