Quipt Home Medical Corp. (“Quipt” or the “Company”) (NASDAQ:QIPT; TSXV:QIPT), a U.S. based leader in the home medical equipment industry, focused on end-to-end respiratory care, is very pleased to announce that it has acquired Access Respiratory Homecare, LLC (“Access Respiratory Homecare”), a business with operations in Louisiana, reporting unaudited trailing 12-month annual revenues of approximately $6.5 million and with anticipated Adjusted EBITDA (defined below) of $1.3 million post integration. As a reminder all figures stated are in USD.
Acquisition Details
The acquisition encompasses two locations in Louisiana, representing the 19th state of service for Quipt. The Company will immediately gain access to the large market of New Orleans, covering the entire coverage sphere of that attractive metro hub. The Company also gains access to the city of Lafayette, as well as the surrounding areas, providing a second hub for Quipt to grow its infrastructure in the state. The acquisition adds over 1,000 referring physicians bringing Quipt’s referring network base to over 20,600, and increases Quipt’s active patient count by over 6,000, bringing Quipt’s total to over 190,000 active patients.
Additionally, Access Respiratory Homecare has a strong management team in place focused on clinical excellence, and like Quipt, offers high-quality service, equipment, and supplies. Access Respiratory Homecare has several difficult to obtain insurance contracts and the expansionary operating footprint aligns closely with regions that have a high prevalence of Chronic Obstructive Pulmonary Disease (“COPD”), a key target patient group; Louisiana is among the highest prevalence U.S. States. According to the National Institutes of Health (NIH), about 304,000 people in Louisiana have COPD1. The acquisition possesses a heavily weighted respiratory product mix inclusive of a robust ventilation therapy program, which contain pediatric patients on the therapy.
The integration process will allow for Quipt’s best-in-class subscription-based resupply program to be firmly cemented, with over 2,400 patients set to join the resupply program, an immediate revenue synergy.
The acquisition will increase Quipt’s annual revenues by approximately $6.5 million and is expected to increase Quipt’s Adjusted EBITDA, post integration, by $1.3 million.
Management Commentary
“We are extremely excited to close the acquisition of Access Respiratory Homecare, providing us a meaningful entrance into Louisiana, representing our 19th state of service. Louisiana is an attractive market that we have been looking to enter with over 300,000 COPD sufferers across the state, and we are thrilled to be able to do so on the heels of this acquisition,” said Greg Crawford, Chairman and CEO of Quipt. “Our resupply program is an immediate actionable revenue synergy for us, with over 2,400 patients set to join our program as we fully integrate the acquisition. Moreover, the valuable commercial insurance contracts, strong referring physician base, and opportunity for a land and expand approach in the state make this a fantastic acquisition for us. Looking ahead our pipeline remains very strong with additional attractive opportunities like Access for us to strategically expand our footprint into new and existing markets in need of robust clinical respiratory care in the home.”
Chief Financial Officer, Hardik Mehta added, “This acquisition allows us to build out our operating footprint into a brand-new state with significant infrastructure as we surpass 190,000 active patients, 20,600 referring physicians, add $6.5 million in revenue, and a significant adjusted EBITDA contribution. Access is a perfect example of the quality acquisition targets we are after that meet our stringent criteria and robust due-diligence process. We will not waver as it comes to our acquisition approach, concentrated on attractive targets that strategically fit our objectives towards becoming a leader in at home respiratory care across the United States focused on superior patient care.”
ABOUT QUIPT 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.
The M&A market for healthcare companies continues to strengthen in 2022 with strategic corporate buyers and private equity investors. Across the continuum of care, these buyers and investors are looking for well established, profitable businesses and offering strong valuations and options for management.
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