AeroCare & AdaptHealth Complete $1.1B Merger

ORLANDO, Fla., (February 4, 2021)—AeroCare Holdings, Inc. announced that it has been acquired by AdaptHealth Corp. The acquisition was consummated for total consideration consisting of approximately $1.1 billion in cash and 31 million shares of AdaptHealth stock. AeroCare’s shareholders—including management and employees, and private investors Peloton Equity, SkyKnight Capital, SV Health Investors and investment funds managed by Morgan Stanley AIP Private Markets’ Secondaries Team (MS AIP Private Markets)—will become shareholders in AdaptHealth as a result of the transaction.

Founded in 2000 by CEO Steve Griggs, and headquartered in Orlando, Florida, AeroCare is a national technology-enabled respiratory and home medical equipment (HME) distribution platform in the United States. It offers a comprehensive suite of direct-to-patient equipment and services including CPAP and BiPAP machines, oxygen concentrators, home ventilators, and other durable medical equipment products. AeroCare maintains extensive relationships with leading national manufacturers and managed healthcare plans, and services over 1,000,000 patients annually from over 300 locations across 30 states, and online through affiliated websites. Since inception, AeroCare has achieved 20 years of consecutive revenue growth, driven by a combination of strong organic growth and targeted acquisitions.

The combined company will operate under the name AdaptHealth, and Steve Griggs will serve as co-CEO with Luke McGee, CEO of AdaptHealth, to lead the company. In addition, Steve Griggs and shareholder designee Ted Lundberg of Peloton will join AdaptHealth’s Board of Directors, which will expand to eleven directors. Michael O’Rourke from Peloton and Jordan Milich from SkyKnight will join as observers to the board.

“I am very excited for AeroCare to join forces with AdaptHealth,” said AeroCare CEO, Steve Griggs. “The combined company is positioned to transform our industry and positively impact the lives of chronically ill patients across the country. Our management team and employees look forward to working with AdaptHealth to build an even stronger business, sharing best practices across each organization to drive operational efficiencies and create enhanced opportunities for our patients, referral sources and other stakeholders.”

Ted Lundberg, co-founding partner of Peloton Equity, added, “We are growth investors who back quality management teams and companies in the healthcare industry that can deliver value to patients and the healthcare system broadly. Our partnership with AeroCare is a great example.  Steve and his team have built a strategic, high growth company that has leveraged technology to transform a critical segment of the industry.”

Matthew Ebbel, SkyKnight managing partner, said, “It has been a privilege to partner with Steve Griggs and AeroCare. We have been truly impressed with the company’s digital innovation and its consistent delivery of high-quality care. We are very excited about the growth and value creation opportunities ahead for the combined AdaptHealth, and we look forward to working with Steve, Luke, and the AdaptHealth team to help create the clear tech-enabled market leader in the HME sector.”

Tom Flynn, managing partner of SV Health Investors, commented, “AeroCare and AdaptHealth have been at the forefront of the industry’s transition to technology-enabled workflows that drive operational efficiency and better care. This combination strengthens both companies and will benefit patients as more healthcare moves to the home.” Nash Waterman, co-head of the secondaries group at MS AIP Private Markets added, “We partner with leading managers like Peloton to back exceptional companies and management teams. Our investment in AeroCare is a case in point, and we are excited to be part of its next phase of growth.”

AeroCare and its shareholders were advised by Morgan Stanley & Co. LLC, Goodwin & Procter LLP, and Brown & Fortunato, P.C. AdaptHealth was advised by Jefferies LLC, Truist Securities, Inc., Willkie Farr & Gallagher LLP and K&L Gates LLP.

Visit adapthealth.com for more information.