Accendra Health, Inc. · NYSE:ACH
Accendra Health — Owens & Minor — Debt Investor Presentation (February 2022)
36 slides from Accendra Health's debt investor presentation, Feb 28, 2022
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation February 28, 2022 – March 1, 2022 Confidential & Proprietary to Owens & Minor, Inc. 1
Slide 2: Safe Harbor
This presentation contains certain “forward looking” statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding the proposed transaction with Apria, Inc. (“Apria”) and opportun
Slide 3: Today's Presenters
Today’s Presenters Ed Pesicka Jonathan Leon Andy Long President & CEO SVP, Corporate Treasurer EVP, Chief Financial Officer C Co on nffide iden nttial ial & & P Pr ro op pr riet ieta ar ry y tto o Ow Owe en ns s & & M Mino inor r,, IIn nc c.. 3 3
Slide 4: Executive Summary
Executive Summary C Co on nffide iden nttial ial & & P Pr ro op pr riet ieta ar ry y tto o Ow Owe en ns s & & M Mino inor r,, IIn nc c.. 4 4
Slide 5: Introduction and Transaction Overview
Introduction and Transaction Overview • On January 7th Owens & Minor, Inc. (“OMI” or the “Company”) entered into a definitive agreement (the “Transaction”) to acquire 1 ~$1,598 million Transaction Value Apria, Inc. (“Apria” or the “Target”) 1 - Transaction value of ~$1,598 million ($37.50 in cash pe
Slide 6: OMI Overview: Leading Healthcare Solutions Provider
OMI Overview: Leading Healthcare Solutions Provider A growth-focused, integrated healthcare solutions provider with broad medical distribution reach, proprietary products and services, and a leading home health business that empowers our customers to advance healthcare • 140 years of legacy service
Slide 7: How Our Businesses Work Together Today
How Our Businesses Work Together Today Seamlessly operate our Americas-based manufacturing and provide support through the hospital and into the home DESIGN RAW MANUFACTURING DISTRIBUTION DELIVERY HOSPITAL/IDN HOME HEALTH CHRONIC CARE AT HOME MATERIALS 1,200+ Branded Medical Product Suppliers N E W
Slide 8: Alternate Care Market Overview
Alternate Care Market Overview Byram competes primarily in the soft goods DME market Byram also competes in the Home Health Agency Market, Chronic Care accounting for an additional at Home (DME Home Health & Overall DME: ~ $50bn Soft Goods) $750mm in B2B Supply Hospice 2021 - 2023 Growth: 6% Spendin
Slide 9: Current Leader in Fast Growing Home Health Sector
Current Leader in Fast Growing Home Health Sector Byram key highlights • Direct-to-patient distributor of medical supplies to U.S. patients with chronic diseases • Specializes in diabetes, urology, ostomy, wound care, incontinence, and breast pumps • In network provider with over 85% of U.S. insured
Slide 10: Apria Builds on OMI's Success in the Patient Direct Segment
Apria Builds on OMI’s Success in the Patient Direct Segment • Leading provider of integrated home healthcare • Provides home healthcare therapies requiring equipment and related services in the U.S. high-touch service • Offers a comprehensive range of products and • Expertise in fee-for service as w
Slide 11: Summary of Strategic Rationale
Summary of Strategic Rationale Apria Expands Critical Patient Direct Segment Patient Direct Product Lines Well-positioned across key product categories exposed to Home Respiratory strong underlying growth drivers Obstructive Sleep Apnea Expands offerings across chronic and acute conditions, with opp
Slide 12: Combined Company Profile
Combined Company Profile Combined ◼ OMI is a global healthcare services company ◼ Apria is a provider of durable home healthcare Global Global and distributor of medical and surgical supplies equipment and related services in the U.S., Solutions Solutions offering a range of products and services fo
Slide 13: Key Credit Highlights
Key Credit Highlights C Co on nffide iden nttial ial & & P Pr ro op pr riet ieta ar ry y tto o Ow Owe en ns s & & M Mino inor r,, IIn nc c.. 13 13
Slide 14: Key Credit Highlights Summary
Key Credit Highlights Summary 1 Favorable trends driving robust demand 2 One of the market leaders in fast growing home health sector 3 Vertical integration creates stability and competitive advantage 4 Diverse earnings profile across customers, payors, products and geographies 5 Low leverage and st
Slide 15: Favorable Trends Driving Robust Demand
1 Favorable Trends Driving Robust Demand 1 Durable Medical Equipment Expenditures: Historic and Projected (CMS) ($bn) 98 93 88 83 78 74 70 66 57 55 55 52 51 49 47 45 44 42 40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E A Ag giin ng g p po op
Slide 16: Favorable Trends Driving Robust Demand (cont'd)
1 Favorable Trends Driving Robust Demand (cont’d) PPE Impact on Global Products Volume PPE Demand Opportunities for growth exist beyond COVID-enhanced levels with the return of elective procedures and demand for PPE in new industries Revised healthcare protocols and new customer stockpiling requirem
Slide 17: One of the Market Leaders in Fast Growing Home Health Sector
2 One of the Market Leaders in Fast Growing Home Health Sector Patient Direct market outlook Broadening service portfolio U.S. Market Size and Growth (Addressable Market) Non-Invasive HME & DME NPWT Ventilation 2 Segment Market Size ($mm) Market CAGR (‘21-23) Ostomy 800 2% Oxygen Sleep Wound Care 63
Slide 18: Vertical Integration Creates Stability and Competitive Advantage
3 Vertical Integration Creates Stability and Competitive Advantage MANUFACTURING HOSPITAL/IDN HOME HEALTH RAW CHRONIC CARE DESIGN DISTRIBUTION DELIVERY AT HOME MATERIALS Apria builds on OMI's end-to-end value chain 1,200+ Branded Medical Product Suppliers Financial Strength Drivers Focused Vertical
Slide 19: Vertical Integration Creates Stability and Competitive Advantage (cont'd)
3 Vertical Integration Creates Stability and Competitive Advantage (cont’d) Key Takeaways: • OMI controls the design, raw materials, strict quality standards, and product specifications in its own facilities with its own teammates • Proprietary branded products are self manufactured, many in the Ame
Slide 20: Diverse Earnings Profile Across Customers, Payors, Products and Geographies
4 Diverse Earnings Profile Across Customers, Payors, Products and Geographies ~10% ~20% ✓ Nearly 2,000 third party $9.8 $1.1 $10.9 payor contracts billion billion billion + = ~90% ~80% 100% ✓ More than 1,200 supplier partners + ✓ Over 4,000 healthcare industry customers + + ✓ Significant diversity w
Slide 21: Low Leverage and Strong Cash Flow Generation
5 Low Leverage and Strong Cash Flow Generation 1,2 Net Leverage Ratio Financial policy • Due to expected free cash flow generation, net leverage is expected to decrease going forward • Target net leverage: 2.0x-3.0x Leverage • High degree of flexibility and prepayability at an attractive cost 4 3.1x
Slide 22: Experienced Management with Proven Track Record of Success
6 Experienced Management with Proven Track Record of Success Years of experience Industry experience Accomplishments ✓ Fully integrated Byram Health and Halyard ED PESICKA President & Chief Executive 25+ acquisitions Officer ✓ Ramped up N95 respirator (1,000%+) and surgical mask (~100%) production d
Slide 23: Experienced Management with Proven Track Record (cont'd)
6 Experienced Management with Proven Track Record of Success (cont’d) Byram and Halyard acquisitions have diversified the business and strengthened the financial profile Acquired Aug 2017 Acquired April 2018 S&IP Business A leading distributor of medical supplies focused on chronic A leading global
Slide 24: Conclusion
Conclusion Leading healthcare solutions company ready to drive growth through capacity and proprietary products expansion, 1 entry into new adjacent markets, and future M&A Core foundation is distribution business, with 140-year history of service, support and partnership with leading 2 healthcare p
Slide 25: Financials
Financials C Co on nffide iden nttial ial & & P Pr ro op pr riet ieta ar ry y tto o Ow Owe en ns s & & M Mino inor r,, IIn nc c.. 25 25
Slide 26: OMI Financial Performance
OMI Financial Performance 1 2 Adjusted EBITDA Revenue $mm $mm 6.1% $9,785 $9,418 $9,211 $651 4.4% $8,480 $1,925 $967 2.9% $1,268 2.5% $597 $8,768 $8,244 $7,860 $371 $7,212 $273 $227 4 2018 2019 2020 2021 2018 2019 2020 2021 Global Solutions Global Products OMI Adjusted EBITDA % of Net Revenue 2,3 Gr
Slide 27: Apria Financial Performance
Apria Financial Performance 1 Adjusted EBITDA Net Revenue $mm $mm $1,145 $1,111 $1,109 $1,089 $157 $158 $198 $173 $40 $232 $227 $43 $41 $42 $454 $480 $174 $430 $439 $156 20% 20% 16% 14% $467 $454 $441 $436 2018 2019 2020 2021 2018 2019 2020 2021 Apria Adjusted EBITDA % of Net Revenue Home Respirator
Slide 28: Capitalization
Capitalization Current and Adjusted Capitalization Actual as of 12/31/2021 As adjusted for the Transaction as of 12/31/2021 X2021 As adjusted X2021 ($mm) Amount Adjusted EBITDA Adj. amount Combined Adjusted EBITDA Cash and cash equivalents $56 27 $83 1 $300mm RC due March 2026 - - 4.375% Senior Note
Slide 29: Appendix
Appendix C Co on nffide iden nttial ial & & P Pr ro op pr riet ieta ar ry y tto o Ow Owe en ns s & & M Mino inor r,, IIn nc c.. 29 29
Slide 30: OMI Existing Segment Overview
OMI Existing Segment Overview Global solutions Global products 1 1 80% of consolidated revenue 20% of consolidated revenue Consolidated operations 1,2 1,2 20% of segment EBITDA 80% of segment EBITDA ● Supplier management, inventory management, clinical ● Manufactures and sources medical and surgical
Slide 31: Byram Healthcare Business Overview
Byram Healthcare Business Overview Byram is one of the leading and fastest-growing brands in home health, and we expect will continue to expand though its direct to patient products for chronic conditions Business Description Top Customers • Direct-to-patient distributor of medical supplies in the U
Slide 32: Halyard Healthcare Business Overview
Halyard Healthcare Business Overview Halyard is a leading global provider of medical supplies and solutions for the prevention of healthcare- associated infections across the acute and alternate site channels Broad Offering of Surgical and Infection Prevention S&IP Business Description Products • Br
Slide 33: Apria Service Line Overview
Apria Service Line Overview Home respiratory therapy Obstructive sleep apnea treatment Negative pressure wound therapy Consolidated operations Historical performance ($mm) 2 1 Net Revenue Net Revenue Net Revenue Net Revenue Adjusted EBITDA $467 $454 $441 $43 $436 $41 $42 $40 $1,145 $480 $1,111 $1,10
Slide 34: OMI Adjusted EBITDA Reconciliation
OMI Adjusted EBITDA Reconciliation Reconciliation of Adjusted EBITDA Year Ended December 31, ($ in millions) 2018 2019 2020 2021 ($ 437) ($ 62) $ 30 $ 222 Net income (loss) Interest expenses, net 71 98 83 48 Other expense, net 4 4 11 44 Income tax (benefit) provision (32) (6) 22 55 Loss from discont
Slide 35: OMI Segment EBITDA Reconciliation
OMI Segment EBITDA Reconciliation Reconciliation of Segment EBITDA Year Ended December 31, Global Solutions Global Products ($mm) 2021 2021 Operating income (loss) $67 $372 Depreciation and amortization 39 51 Segment EBTIDA $106 $423 C Co on nffide iden nttial ial & & P Pr ro op pr riet ieta ar ry y
Slide 36: Apria Adjusted EBITDA Reconciliation
Apria Adjusted EBITDA Reconciliation Reconciliation of Adjusted EBITDA Year Ended December 31, 2018 2019 2020 2021 ($mm) Net income $13 $16 $46 $65 Interest expenses, net 0 4 6 8 Loss from equity method investment – – – 1 Income tax (benefit) provision 7 8 19 24 Operating income (loss), as reported
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