AdaptHealth Buying AeroCare in $2 Billion Deal

PLYMOUTH MEETING, Penn. (December 3, 2020)—AdaptHealth Corp., a provider of home medical equipment (HME) and related services, announced Tuesday that it has entered into an agreement to acquire Orlando, Florida-based AeroCare Holdings, Inc., in a deal valued at about $2 billion.

The transaction currently includes about $1.1 billion in cash and 31 million shares of AdaptHealth common stock. The two companies have both focused heavily on technology and combined will have a presence in 47 states. A company presentation said the new firm will be the largest independent HME in the country.

AdaptHealth offers a full range of medical products and services, including CPAP supplies and services, diabetes devices and supplies, HME for post-acute care, home oxygen and related therapies and general HME for wound care, ostomy, urological and nutritional needs. It reaches about 1.8 million patients annually with a network of 269 locations in 41 states.

Founded in 2000, AeroCare is a national technology-enabled respiratory HME distribution platform with more than 300 locations across 20 states, offering a suite of direct-to-patient equipment and services, including CPAP and BiPAP machines, oxygen concentrators, home ventilators, and other durable medical equipment products.

The combined company will operate under the name AdaptHealth, and Luke McGee, CEO of AdaptHealth, and Steve Griggs, CEO of AeroCare, will jointly lead the company as co-CEOs. Josh Parnes will continue to serve as president. In addition, AdaptHealth will expand its Board of Directors at closing of the transaction to 11 directors, with Steve Griggs and shareholder designee Ted Lundberg of Peloton Equity to join the Board.

“Both AdaptHealth and AeroCare have high-growth profiles, including end markets indexed to an aging population, attractive geographies, and impressive track records of integrating numerous acquisitions every year,” McGee said in a conference call announcing the deal. “Over the past five years, each company has focused on using technology to reduce costs and advance the patient and referral experiences in ordering home medical equipment and supplies. This transaction is highly strategic and a complementary fit with our vision, strategy, and platform. The combined company will maintain a long-term strategy of delivering connected healthcare in the home.”

Both companies have been aggressively acquiring other companies—AdaptHealth has closed 64 since 2017 and Aerocare has closed 50 in the same period—and leadership predicted continued growth both through mergers and acquisition and organic growth. The long-term target, according to the company’s investor documents, is a mix that’s about 40% sleep, 30% diabetes and 30% everything else. Company leadership said they expect annual organic growth for the combined company to be in the 8%-10% range.


The announcement also included information about AdaptHealth’s recent purchase of New England Home Medical, a direct-to-patient diabetes supplier that has more than 3,900 patients using continuous glucose monitoring.