CINCINNATI (April 21, 2022)—Quipt Home Medical Corp., a United States-based leader in the home medical equipment industry, focused on end-to-end respiratory care, announced that it has acquired Good Night Medical, LLC, a business with operations across seven U.S. states, for approximately $7 million in Cash.
It is expected the acquisition will increase Quipt’s annual revenues by approximately $7.5 million, with anticipated adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.5 million (20% margin) post integration.
“This acquisition of Good Night Medical is a prime example of the quality respiratory businesses we have in our robust pipeline,” said Greg Crawford, Chairman and CEO of Quipt. “Good Night Medical strengthens our health care network across multiple states, enhancing our national coverage sphere over an area that includes about 5 million COPD sufferers in the United States.”
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 expanded operating footprint aligns closely with regions that have a high prevalence of chronic obstructive pulmonary disease (COPD), 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 homecare services space for over nine 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 strong payer 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. 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.
“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,” said Crawford.
Visit quipthomemedical.com for more information.
