About Adapt Health Care
Since its founding in 1993, SV has invested in more than 200 companies with more than 90 of these having achieved successful acquisitions or IPOs. AdaptHealth defines Adjusted EBITDA less Patient Equipment Capex as Adjusted EBITDA less patient equipment acquired during the period without regard to whether the equipment was purchased or financed through lease transactions. When Robert’s not covering the latest in home health care news, you can likely find him rooting for the White Sox or roaming his neighborhood streets playing Pokemon Go. Before joining HHCN, Robert covered everything from big agribusiness to the hottest tech startups. Under terms of the agreement, AdaptHealth will pay $1.1 billion cash to AeroCare, with AeroCare also receiving 31 million shares of AdaptHealth common stock. AdaptHealth intends to fund the cash portion of the consideration and associated costs through incremental debt; it has committed debt financing from Jefferies Finance LLC, according to the company.
AdaptHealth services approximately 3.3 million patients annually in all 50 states through its network of 678 locations in 47 states. AdaptHealth 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. Upon the closing of the AeroCare transaction, AdaptHealth now services nearly 3 million patients annually in all 50 states through a network of over 500 locations across 46 states.
AHCO is forecast to become profitable over the next 3 years, which is considered above average market growth. On the 20th of August, Shaw Rietkerk sold around 49k shares on-market at roughly US$23.16 per share. This was the largest sale by an insider in the last 3 months. Shaw has been a seller over the last 12 months, reducing personal holdings by US$3.2m. The company also raised its revenue forecast for fiscal year 2021 to a range of $2.05 billion to $2.20 billion from a range of $1.30 billion to $1.40 billion. Cost basis and return based on previous market day close.
Adapt’s management and major equity holders will roll their equity into AdaptHealth, and proceeds generated by the transaction will be used by AdaptHealth primarily to reduce debt and fund future growth and acquisitions. A fund managed by Deerfield has signed a subscription agreement to support the transaction to backstop redemptions and/or provide additional capital to the company. Adapt’s current management team is expected to remain in place, supplemented by Richard Barasch as newly appointed chairman of AdaptHealth. Founded in 2012 and headquartered in Plymouth Meeting, PA, Adapt offers a full suite of medical products for both rental and sale, with a focus on respiratory and/or mobility equipment, including CPAP sleep equipment, oxygen equipment, wheelchairs, walkers, and hospital beds. Adapt serves over 1.0 million patients and performs 7,000 deliveries per day across 49 states through more than 150 locations. The Company has created a scalable, purpose-built, and centralized operating platform that optimizes client service and delivery, improves compliance, drives operational and financial efficiencies, and increases enterprise-wide profitability.
And then they’re doing a few other smaller acquisitions, and all those got combined into the existing operations. The next step, so in our definition of organic growth for the company, we’ve made two adjustments. I mean, I think it’s no surprise, we continue to exclude that from our kind of analytics. I guess I’ll start off with a question, let’s address the elephant in the room.
But if you look at the first half of the year, we’re right in line with that two-thirds of every dollar of adjusted EBITDA converting to cash flow from operations. I mean we’re — the numbers and what we’re raising for acquisitions is right in line with the base business, if you will. I would say we said up to $30 million of a revenue impact for the second half. I don’t think the number is 0, I don’t think it’s $30 million, likely somewhere in between there.