Quipt Acquires DME Business in Illinois; Annual Revenue Expected to Increase by Approximately $2.5 Million

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The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Quipt Home Medical Corp QIPT QIPT, announced that it has recently acquired a business with operations in Illinois, reporting unaudited trailing 12-month annual revenues of approximately $2.5 million. Post integration, Quipt expects an Adjusted EBITDA (defined below) for the acquisition target of $0.6 million.

Acquisition Details

The acquisition adds a strategic location servicing Central Illinois, a heavily weighted respiratory product mix, and over 3,700 active patients. Moreover, the acquisition provides Quipt with important insurance contracts and decades of operating experience, with an over 40-year operating track record in the markets served. The business has a diverse payor mix and a full suite of products with a focus on respiratory care, representing over 85% of the mix.

The acquisition further expands Quipt’s operations in Illinois after the Company entered the market in August of 2020 and provides Quipt a coverage sphere between the major markets of St. Louis, Missouri and Chicago, Illinois. With the recent acquisitions, the expansionary operating footprint aligns closely with regions that have a high prevalence of COPD, a key target patient group; this includes Arkansas, Mississippi, Missouri, and Illinois, which are among the highest prevalence U.S. States. According to the NIH, about 570,000 people in Illinois have COPD.

The management team in place at the acquisition target has historically focused on a robust service-intensive model, centered around patient education and compliance which is highly compatible with Quipt’s operating premise. This acquisition provides immediate cross-selling and patient growth opportunities and adds patients to Quipt’s existing subscription-based resupply program.

Terms of Agreement

Under the terms of the definitive purchase agreement, Quipt acquired the DME operation of the business for approximately $1.7 million in cash and the real estate for $0.5 million. Post-integration, the acquisition is expected to increase Quipt’s annual revenues by approximately $2.5 million and Adjusted EBITDA by $0.6 million.

“Our robust operating engine and proven ability to integrate acquired assets allow us to continue the strong pace of closing strategic acquisitions,” said Greg Crawford, Chairman and CEO of Quipt. “Since July we have now completed 6 acquisitions with combined revenues of over $16 million. Combining these newly acquired entities provides us a pathway to scale into new states with each business having a proven track record in the markets they serve and diversified product mixes. In this short period of time, we have amassed infrastructure in 4 new states and further penetrated existing states such as Illinois.”

“I also want to take this opportunity to reiterate how strongly the underlying business continues to perform amongst the challenges presented from the global pandemic and supply chain constraints. Demand for respiratory equipment continues to be robust, and we have not seen any signs of that slowing. We are extremely excited with the operating excellence we have been able to display to date and look forward to carrying the strong momentum into 2022.”

Chief Financial Officer, Hardik Mehta added, “We continue to invest in technology to improve our operating efficiencies, whether through the ongoing use of our data-driven tools, revenue cycle management or through our automated subscription-based resupply program. These actions drive sustained value to the company and allow us to continue to increase our productivity. Moreover, we have a robust balance sheet with over $30 million in cash, and a $20 million undrawn credit facility allowing us to strategically work through our acquisition pipeline, which includes larger revenue opportunities that meet our criteria, and I am extremely confident in our pace staying strong through the remainder of 2021 and into 2022.”

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.