Quipt acquires Great Elm Healthcare for $80M, sees accretion

Quipt Home Medical (QIPT) is pleased to announce that it has acquired Great Elm Healthcare , a division of Great Elm Group (GEG) with an effective date of December 31. Great Elm operates a complete line of respiratory related durable medical equipment service locations across eight states in the Midwest, Southwest and Pacific Northwest. Based on an independent quality of earnings report, Great Elm had unaudited revenues for the 12 months ended August 31, of $60M with an Adjusted EBITDA of $13M. Establishes Quipt as a leading respiratory-focused home medical equipment suppliers in the United States with significant scale, serving 270,000 patients with 32,500 referring physicians across 115 locations in 26 states. The combination of Quipt and Great Elm has a combined Annualized Revenue and Annualized Adjusted EBITDA of $220M and $47M, respectively, based on Quipt’s reported audited results for the fourth quarter ended September 30 and Great Elm’s unaudited results for the 12 months ended August 31. Pursuant to the membership interest purchase agreement dated January 3 the total purchase price is $80M comprised of $73 million in cash, $5 million in assumed debt, and 431,996 Quipt common shares at a deemed price per share equal to $4.63, representing a purchase price of 6.0x Adjusted EBITDA pre cost savings and synergies. Quipt has identified $2M in cost savings and synergies, which is expected to be captured over the first six months and is expected to result in Great Elm’s Anticipated Annualized Adjusted EBITDA of $15Mn, representing a purchase price of 5.2x Adjusted EBITDA post cost savings and synergies. The Anticipated Annualized Adjusted EBITDA is $49M for Quipt. Expected to be financially accretive to overall growth and cash flow. The combination of two leading clinical respiratory providers is expected to enhance Quipt’s patient-centric ecosystem across the entire company by further collaborating with key sales touchpoints, including healthcare providers like hospitals, doctors, rehab centres, and long-term care facilities. With this Acquisition Quipt successfully surpasses its previously announced outlook of achieving Annualized ?Revenue by the end of calendar 2022 of $180-$190M.