AdaptHealth Signs Definitive Agreement to Acquire Patient Care Solutions Business From McKesson Corporation
November 22 2019 - 8:00AM
Business Wire
AdaptHealth Corp. (NASDAQ: AHCO; AHCOW) (“AdaptHealth” or the
“Company”), the third largest home medical equipment (HME) provider
in the United States, today announced it has entered into a
definitive agreement to acquire the Patient Care Solutions (PCS)
business from McKesson Corporation. The proposed transaction is
expected to close in December 2019, subject to the satisfaction of
customary closing conditions. The total investment, including
restructuring costs until the business is fully integrated on
AdaptHealth’s platform in the latter half of 2020, is expected to
be approximately $30 million.
PCS currently provides wound care supplies, ostomy supplies,
urological supplies, incontinence supplies, diabetic care supplies,
and breast pumps directly to patients across the United States. The
company maintains extensive national relationships with physicians,
medical facilities and customers, and currently serves all 50
states.
For the trailing twelve months ended October 31, 2019, PCS
generated net revenues of approximately $134 million. In connection
with the acquisition, AdaptHealth will enter into a supply and
distribution agreement with McKesson Corporation with respect to
PCS’s HME service lines.
“The acquisition of PCS will, upon closing, represent an
important step in our continuing growth as an industry
consolidator,” said Luke McGee, AdaptHealth’s CEO. “In addition to
adding scale and strengthening our geographic footprint, we will
add urological and ostomy products to our already comprehensive HME
product portfolio, and significantly increase our exposure in areas
such as wound care, breast pumps, incontinence supplies, and
diabetic care. We believe the addition of these products will
double our overall addressable market.”
Josh Parnes, President and COO of AdaptHealth added, “As part of
the transaction, we are also very pleased to expand our existing
distribution relationship with McKesson. The acquisition of PCS
complements our existing PAP (sleep) resupply offering and will
allow us to provide an expanded set of supplies to both the current
customers of PCS and AdaptHealth.”
About AdaptHealth Corp.
AdaptHealth Corp. (“AdaptHealth”) is the third largest home
medical equipment company in the United States. AdaptHealth
provides a full suite of medical products and solutions designed to
help patients manage chronic conditions in the home, adapt to life
and thrive. Product and services offerings include: sleep therapy
equipment (CPAP and BiPAP machines and supplies), respiratory
equipment (including oxygen, invasive and non-invasive
ventilation), mobility equipment, wheelchairs, walkers, and
hospital beds. AdaptHealth also provides custom bracing services,
hospice-focused HME services, wound therapy and nutritional HME
services. The company is proud to partner with an extensive and
highly-diversified network of referral sources, including acute
care hospitals, sleep labs, pulmonologists, skilled nursing
facilities, and clinics. AdaptHealth services beneficiaries of
Medicare, Medicaid and commercial insurance payors. As of September
30, 2019, AdaptHealth services over one million patients annually
in 49 states through its network of 189 locations. Learn more at
www.adapthealth.com.
Forward-Looking
Statements
This press release includes certain statements that are not
historical facts but are forward-looking statements for purposes of
the safe harbor provisions under the United States Private
Securities Litigation Reform Act of 1995. Forward-looking
statements generally are accompanied by words such as “believe,”
“may,” “will,” “estimate,” “continue,” “anticipate,” “intend,”
“expect,” “should,” “would,” “plan,” “predict,” “potential,”
“seem,” “seek,” “future,” “outlook,” and similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements
include, but are not limited to, statements regarding projections,
estimates and forecasts of revenue and other financial and
performance metrics and projections of market opportunity and
expectations. These statements are based on various assumptions and
on the current expectations of AdaptHealth Corp. management and are
not predictions of actual performance. These forward-looking
statements are provided for illustrative purposes only and are not
intended to serve as, and must not be relied on, by any investor
as, a guarantee, an assurance, a prediction or a definitive
statement of fact or probability. Actual events and circumstances
are difficult or impossible to predict and will differ from
assumptions. Many actual events and circumstances are beyond the
control of AdaptHealth Corp. These forward-looking statements are
subject to a number of risks and uncertainties, including the
outcome of judicial and administrative proceedings to which
AdaptHealth Corp. may become a party or governmental investigations
to which AdaptHealth Corp. may become subject that could interrupt
or limit AdaptHealth Corp.’s operations, result in adverse
judgments, settlements or fines and create negative publicity;
changes in AdaptHealth Corp.’s clients’ preferences, prospects and
the competitive conditions prevailing in the healthcare sector. A
further description of such risks and uncertainties can be found in
the Company’s filings with the Securities and Exchange Commission.
If the risks materialize or assumptions prove incorrect, actual
results could differ materially from the results implied by these
forward-looking statements. There may be additional risks that
AdaptHealth Corp. presently knows or that AdaptHealth Corp.
currently believes is immaterial that could also cause actual
results to differ from those contained in the forward-looking
statements. In addition, forward-looking statements reflect
AdaptHealth Corp.’s expectations, plans or forecasts of future
events and views as of the date of this press release. AdaptHealth
anticipates that subsequent events and developments will cause
AdaptHealth Corp.’s assessments to change. However, while
AdaptHealth Corp. may elect to update these forward-looking
statements at some point in the future, AdaptHealth Corp.
specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing AdaptHealth Corp.’s assessments as of any date
subsequent to the date of this press release. Accordingly, undue
reliance should not be placed upon the forward-looking
statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20191122005188/en/
AdaptHealth Corp. Gregg Holst Chief Financial Officer
(484) 301-6599 gholst@adapthealth.com Brittany Lett Vice President,
Marketing (909) 915-4983 blett@adapthealth.com The Equity Group
Inc. Devin Sullivan Senior Vice President (212) 836-9608
dsullivan@equityny.com Kalle Ahl, CFA Vice President (212) 836-9614
kahl@equityny.com
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