CINCINNATI—Quipt Home Medical Corp., a U.S.-based home medical equipment provider focused on end-to-end respiratory care, announced it acquired a business with operations in Mississippi, Texas and Louisiana reporting unaudited annual revenues of approximately $9 million with anticipated adjusted earnings before income, taxes and depreciation (EBITDA) of $2 million post-integration. Quiet did not announce the name of the company it is acquiring.
“The completion of this transaction demonstrates our ongoing patience and discipline as it relates to our capital allocation approach," said Greg Crawford, chairman and CEO of Quipt. "At favorable terms, we were able to significantly expand in three attractive existing states. Given that there are more than 1.5 million COPD patients residing in Mississippi, Texas and Louisiana, we increase our footprint in those three states. Our team of operators will once again utilize our tried-and-true integration approach to efficiently integrate this business onto our existing platform, continuing to build scale across the organization. Moreover, we believe there is an opportunity to leverage our resupply program immediately, creating actionable revenue synergies for us. Additionally, the substantial patient base and excellent referral network we have built up in these three states allow us to take a “land and expand” approach to future growth, which will support our organic growth goals.”
The acquisition adds 10 locations across three states, 17,500 active patients, 1,900 unique referring physicians, important insurance contracts and decades of operating experience in the markets served. The company said the acquisition allows it to further penetrate key sales touch points in major target markets across Mississippi, Texas and Louisiana and is expected to assist with organic growth initiatives in those markets. Moreover, the business has a diverse payer mix and a heavily weighted respiratory product mix.
The operating footprint aligns closely with regions that have a high prevalence of Chronic Obstructive Pulmonary Disease (COPD), a key target patient group. According to the National Institutes of Health (NIH) about 1.5 million people across the three states have COPD. Quipt said as a growing leader in clinical respiratory care, the favorable demographics, additional insurance contracts and infrastructure, afford it the ideal conditions to accelerate its national expansion efforts.
Quipt said it now has, including the acquisition:
- 287,500 current active patients
- 34,400 referring physicians
- 125 locations across 26 U.S. states
Additionally, Quipt said, the acquisition adds significant opportunity to increase resupply revenue once sleep patients are onboarded to its resupply program and the acquisition footprint is expected to create additional opportunities to expand Quipt’s access for tuck-in acquisitions.
The acquisition increases Quipt’s current annual revenues by approximately $9 million and is expected to increase Quipt’s adjusted EBITDA, post integration, by $2 million. The acquisition purchase price is at historical multiples paid by the Company.
“This accretive transaction checks all the boxes for us, as we were able to acquire respiratory-focused business in attractive markets at favorable terms," Chief Financial Officer, Hardik Mehta said. "The acquisition adds $9 million in annual revenue and $2 million of Adjusted EBITDA post-integration, which represents a very strong margin profile. We are very excited about the growth opportunities that will open as a result of this acquisition. Post-closing, we continue to possess a very strong balance sheet with significant flexibility to go after accretive acquisition targets that fit our stringent criteria. We anticipate a smooth integration process, which has served as the cornerstone of our consistently strong financial and operational results. As we look ahead, we will continue to expand our ability to serve critical geographic areas with our full range of respiratory care products and services.”