The global home healthcare market could be worth $839 billion by 2028, says Zion Market Research, which could be a significant catalyst for companies such as Quipt Home Medical Corp. (NASDAQ: QIPT) (TSXV: QIPT), Amedisys Inc. (NASDAQ: AMED), LHC Group Inc. (NASDAQ: LHCG), Savaria Corporation (TSX: SIS) (OTC: SISXF) and Addus Homecare Corporation (NASDAQ: ADUS). In addition, obesity, smoking, an aging population, and pandemic-related illnesses are reportedly contributing to a rise in the need for home therapeutic respiratory devices. From the onset of chronic obstructive pulmonary disease (COPD) to the demand for continuous positive airway pressure (CPAP) machines, the prevalence of respiratory disorders is pushing the device market to a valuation of $47 billion and projections to reach more than $68 billion by 2032, according to a study by Future Market Insights.
One of the Companies Benefiting is Quipt Home Medical Corp. (NASDAQ: QIPT) (TSXV: QIPT)
Quipt Home Medical Corp., 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 Good Night Medical, LLC, a business with operations across seven U.S. states, reporting unaudited trailing 12-month annual revenues of approximately $7.5 million and with anticipated Adjusted EBITDA (defined below) of $1.5 million (20% margin) post integration. As a reminder all figures stated are in USD.
Acquisition Details
The acquisition encompasses locations across seven U.S. states including Arkansas, Georgia, Massachusetts, North Carolina, Ohio, Texas and California. The acquisition provides Quipt an expansionary opportunity into Massachusetts, North Carolina and Texas, which are new U.S. states for Quipt’s coverage sphere including important new commercial insurance contracts. The other four U.S. states are current areas of service for Quipt, which provide for actionable revenue and cost synergy opportunities as further scale is created in each operating region. The expansionary operating footprint aligns closely with regions that have a high prevalence of Chronic Obstructive Pulmonary Disease, a key target patient group; cumulatively the seven states Good Night Medical operates in contain some of the highest prevalence U.S. states. According to the National Institutes of Health (NIH), about 5 million people between the seven states have COPD. The favorable demographics, additional insurance contracts, and infrastructure provides Quipt with the right set of circumstances to further accelerate its national expansion efforts as a leader in clinical respiratory care.
The integration process will include Quipt applying its proven subscription-based resupply program to each acquired business unit, as well as the highly intensive service model Quipt is known for. Consistent with the transactions Quipt has completed to date, Good Night Medical brings an experienced operational team.
Good Night Medical has been a leader in the respiratory home care services space for over 9 years and has several difficult to obtain insurance contracts that significantly enhance Quipt’s presence in each of Good Night Medical’s regions. Good Night Medical has 10,000 active patients, bringing Quipt’s total to approximately 180,000 active patients, and like Quipt, Good Night Medical offers high-quality service, equipment, and supplies.
Moreover, Good Night Medical has strong diversification amongst referral sources, and a payor base, with exposure to less than 30% from Medicare. Furthermore, Good Night Medical has no exposure to ventilation therapy, which provides Quipt an opportunity to grow as well as other complimentary clinical respiratory products and services. In addition, Good Night Medical provides Quipt the opportunity to add patients to Quipt’s existing subscription-based resupply program, and Quipt expects that it can derive strong revenue synergies from this initiative.
Under the terms of the definitive purchase agreement, Quipt acquired Good Night Medical for approximately $7 million in cash. It is expected the acquisition will increase Quipt’s annual revenues by approximately $7.5 million, and, post integration, Adjusted EBITDA by $1.5 million (20% margin).
Reiteration of Outlook for Calendar End 2022 (Fiscal Q1 2023)
Based on the current operations, market trends and completed and prospective acquisitions, the Company is reiterating its outlook for its annual run-rate revenue by the end of calendar 2022 (Fiscal Q1 2023) to be $180-$190 million with $38-$43 million in run-rate Adjusted EBITDA.
Management Commentary
“This acquisition of Good Night Medical is a prime example of the quality respiratory businesses we have in our robust pipeline. Good Night Medical strengthens our healthcare network across multiple states, enhancing our national coverage sphere over an area that includes about 5 million COPD sufferers in the United States. Furthermore, I believe that this acquisition will help us achieve long term cost saving goals that will drive our future margin acceleration by giving us increased scale across the organization,” said Greg Crawford, Chairman and CEO of Quipt. “We see several actionable synergies and believe our strong sleep re-supply business presents us with significant upside as we deploy our technology therein. Integration is the key to our ongoing financial and operating success as it allows us to continue the strong pace of closing strategic acquisitions, alongside the stringent approach to our due-diligence process that provides us acquisition opportunities that work towards our long-term strategic objectives. We are extremely encouraged about the growth path we are on, carving out a special segment of the homecare industry and we are well positioned to seize the growth opportunity ahead of us.”
“Additionally, I want to take a moment to provide an update on our sleep therapy business unit. As noted in our fiscal Q1 2022 financial news release, we have seen significant backlog, with nearly 8,000 patients waiting for a sleep device. It is important to understand that this backlog is extremely sticky with the entire industry experiencing supply constraints, and we view the revenue impact as delayed not lost. Furthermore, I am pleased to share that we began the month of April with the largest on hand inventory of CPAP devices since the recall commenced and I am cautiously optimistic as we move through the second half of the year that the supply pressures will continue to alleviate.”
Chief Financial Officer, Hardik Mehta added, “This acquisition allows us to build out our operating footprint within existing and new markets as we reach approximately 180,000 active patients, add $7.5 million in revenue, a meaningful EBITDA contribution, as well as providing us significantly enhanced infrastructure across seven states. We are pleased with the consistent performance across our entire operation year to date and are very well positioned as we move through 2022 and beyond to grow into a leader in respiratory homecare across the United States. The bullish regulatory environment, industry tailwinds, and need for respiratory homecare, gives us an incredible runway in strategically gaining market share in favorable geographies. Looking at our current pipeline, it remains very exciting, and we expect to remain very active over the near term with exciting targets that meet our stringent criteria and are thrilled to continue to execute on our growth pillars over the course of the year.”
Other related developments from around the markets include:
Amedisys Inc., a leading provider of quality home health, hospice, personal care and high-acuity care, will report results for the first quarter ended March 31, 2022, after the market closes on April 27, 2022. The Company will host an investor conference call to discuss these results at 11:00 a.m. ET on April 28, 2022. To participate on the conference call, please call a few minutes before 11:00 a.m. ET to either (877) 524-8416 (toll-free) or (412) 902-1028 (toll). A replay of the call will be available through May 28, 2022, by dialing (877) 660-6853 (toll-free) or (201) 612-7415 (toll) and entering access ID 13729119.
Optum, a diversified health services company, and LHC Group, a national patient-focused provider of high-quality in-home health care services, have agreed to combine to further strengthen their shared ability to advance value-based care, especially in the comfort of a patient’s own home. The agreement calls for the acquisition of LHC Group’s outstanding common stock for $170 per share. The combination of LHC Group with Optum Health, which works with over 100 health plans, unites two organizations dedicated to providing compassionate and comprehensive care to patients and their families. LHC Group’s history of high-quality home and community-based care matched with Optum’s extensive value-based care experience and resources will accelerate the combined companies’ ability to deliver integrated care, improving outcomes and patient experiences.
Savaria Corporation, a global leader in the accessibility industry, announced its results for fiscal 2021. “Looking back on 2021, Savaria experienced its most transformative year ever. We propelled forward to be a world leader in accessibility with our acquisition of Handicare. I am happy to see our revenue reached $661 million, an increase of 86.5% over 2020. Our adjusted EBITDA was $100.3 million, an increase of 67.7% compared to 2020,” said Marcel Bourassa, President and Chief Executive Officer of Savaria. ““What I can see clearly is how we will work together with our integrated teams to reach our revenue goal of $1 billion in 2025. This can be achieved without new acquisitions, yet we have the flexibility, due to our current balance sheet, to make acquisitions that add sales territory or complementary products. Our current product line-up to improve millions of people’s mobility, reaches into 40 countries through 1,500 dealers backed by 2,250 employees, making us one-of-a-kind in our industry. Our recent projects and new initiatives will yield more competitive advantages for us, and with Handicare, we are benefiting from new expertise and complementary talent. As always, I thank all Savaria employees for consistently working to reach our goals.”
Addus HomeCare Corporation, a provider of home care services, announced that it will release earnings for the first quarter ended March 31, 2022, on Monday, May 2, 2022, after the market close. Addus HomeCare will host a conference call on Tuesday, May 3, 2022, at 9:00 a.m. Eastern time. Joining the call from the Company will be Dirk Allison, Chairman and CEO, Brian Poff, Executive Vice President and CFO, and Brad Bickham, President and COO. To access the live call, dial (877) 270-2148 (international dial-in number is (412) 902-6510) and ask to join the Addus HomeCare earnings call. A telephonic replay of the conference call will be available through midnight on May 10, 2022, by dialing 1-877-344-7529 (international dial-in number is (412) 317-0088) and entering pass code 4847379.
Legal Disclaimer / Except for the historical information presented herein, matters discussed in this article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Winning Media is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. Quipt Home Medical Corp. paid three thousand five hundred dollars for advertising and marketing services to be distributed by Winning Media. Winning Media is only compensated for its services in the form of cash-based compensation. Winning Media owns ZERO shares Quipt Home Medical Corp. Please click here for disclaimer.
Contact Information:
2818047972
ty@LifeWaterMedia.com