Accendra Health, Inc. · NYSE:ACH
Accendra Health — Owens & Minor — Debt Investor Presentation (March 2025)
44 slides from Accendra Health's debt investor presentation, Mar 20, 2025
Slide 1: Lender Presentation March 20, 2025
Lender Presentation March 20, 2025 Proprietary to Owens & Minor, Inc. © 2025 Owens & Minor, Inc. Exhibit 99.1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains certain “forward-looking” statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Some of these statements can be identified by terms and phrases such as “outlook,” “believes,” “e
Slide 3: Today's Presenter
Today’s Presenter Jon Leon EVP, Chief Financial Officer Proprietary to Owens & Minor, Inc.
Slide 4: Executive Summary
Executive Summary Proprietary to Owens & Minor, Inc.
Slide 5: Introduction and Transaction Overview
Introduction and Transaction Overview On July 22nd, 2024 Owens & Minor, Inc. (“Owens & Minor”, “OMI” or the “Company”) entered into a definitive agreement (the “Transaction”) to acquire Rotech Healthcare Holdings, Inc. (“Rotech” or the “Target”) OMI is a global healthcare solutions company integrati
Slide 6: Owens & Minor Overview
Owens & Minor Overview 4,000+ Healthcare Providers Served 140+ Years of Dedicated Service ~400+ Facilities Worldwide ~85% of U.S. Population Accessible Through Payor Relationships ~3.2M Patients Served in the Home Owens & Minor, Inc. (NYSE: OMI) is a Fortune 500 global healthcare solutions company p
Slide 7: Compelling Strategic Rationale and Value Creation Opportunity
Compelling Strategic Rationale and Value Creation Opportunity Strategic Rationale Value Creation Targets Accelerate long-term revenue growth Accretive to operating and EBITDA margins Improve free cash flow generation Accretive to Adjusted EPS Strengthens Patient Direct by expanding product offerings
Slide 8: Alignment with Our Patient Direct Vision
Alignment with Our Patient Direct Vision Framing the 2028 Patient Direct Vision Patient Direct Strong brand recognition with a national footprint and local presence Proven model is expected to continue to drive organic growth Expansive opportunities to serve patients across core disease categories a
Slide 9: Rotech Further Diversifies our Patient Direct Business
Rotech Further Diversifies our Patient Direct Business Proprietary to Owens & Minor, Inc. Rotech enhances Patient Direct’s diversified product portfolio Rotech shifts Patient Direct’s payor mix slightly away from commercial payors toward government Combined Patient Direct Payor Mix(1) Combined Patie
Slide 10: Owens & Minor Overview
Owens & Minor Overview Proprietary to Owens & Minor, Inc.
Slide 11: Patient Direct – The Future of Home-based Care
Patient Direct – The Future of Home-based Care Over the last five years we built a strong growth platform that we believe is at the center of where healthcare is trending Doubled down on our belief in our Patient Direct business with the addition of Apria Track record of strong growth throughout our
Slide 12: Benefits of Home-based Care
Benefits of Home-based Care Allows patients to receive treatment of chronic illnesses in their home Greater patient independence and improved outcomes 2 1 Growing demand for treatment of chronic illnesses Technology and product advancement allow for additional chronic conditions to be treated at hom
Slide 13: A Market Leader in Home-based Care
A Market Leader in Home-based Care • • • • • • • Strategic position in key categories 85% of annual revenue is recurring revenue from existing patient base Diabetes category is primarily comprised of Type 1 and Type 2 insulin-dependent patients A leading revenue cycle Revenue by Disease State 1 As o
Slide 14: Share of Active Patients by Disease State
Share of Active Patients by Disease State of annual revenue is recurring revenue from existing patient base 85% • • Diabetes Wound Care • Respiratory • Incontinence/Urology • • • A Market Leader in Home-based Care 290M Covered lives ~3.2M Active patients1 $2.7B Annual revenue 1 As of FY24. Proprieta
Slide 15: PD partners with payors covering 290M Lives
PD partners with payors covering 290M Lives PD Payor Mix A Market Leader in Home-based Care Access to ~85% of U.S. population Growing Medicare Advantage population Majority of payor partnerships are evergreen Rated Best Overall Diabetes Supplier 2020-2023 Net Promoter Scores of 2-3x healthcare bench
Slide 16: Contracted with High Quality Manufacturers
A Market Leader in Home-based Care Contracted with High Quality Manufacturers Proprietary to Owens & Minor, Inc. 1 As of FY24. $2.7B Annual revenue 290M Covered lives ~3.2M Active patients Globally Diverse Branded Manufacturers
Slide 17: Solid Foundation in Product & Healthcare Services
Solid Foundation in Product & Healthcare Services Historical foundation Very large market 3 primary market players Must better align production costs and product portfolio Status quo not acceptable Well positioned to achieve success Significant Opportunity to Drive Profitability Medical Distribution
Slide 18: Rotech Overview
Rotech Overview Proprietary to Owens & Minor, Inc.
Slide 19: Rotech at-a-Glance
Rotech at-a-Glance Proven Track Record A leading Home Medical Equipment distributor Partner of choice for many payors, providers, suppliers and patients 40+ years in operation led by a seasoned management team with 100+ years of combined experience Compelling Geographic Footprint Robust and scalable
Slide 20: Product Lines Overview
Product Lines Overview Oxygen Sleep Therapy Ventilators Wound Care Diabetes Durable Medical Equipment/Other Products Oxygen concentrators, portable oxygen concentrators, home fill systems, tanks and oxygen contents CPAP, BiPAP, and supplies such as face masks, humidifiers and tubing Non-invasive and
Slide 21: Key Credit Highlights
Key Credit Highlights Proprietary to Owens & Minor, Inc.
Slide 22: Key Credit Highlights Summary
Key Credit Highlights Summary 1 Favorable trends driving robust demand 5 Strong cash flow generation and disciplined balance sheet management 4 Diverse earnings profile across customers, payors, products and geographies 2 Wide reaching traditional distribution business with expansion in proprietary
Slide 23: Favorable Trends Driving Robust Demand
Favorable Trends Driving Robust Demand Durable Medical Equipment Expenditures: Historic and Projected (CMS) ($bn)1 CAGR 2016A–2023E: 6.1% CAGR 2024E–2032E: 5.4% Aging population Continued shift toward home healthcare Rising incidence of chronic diseases Preference for in-home care Highly fragmented
Slide 24: Macro Trends in Home-based Care in Our Favor
Macro Trends in Home-based Care in Our Favor Byram and Apria compete in the DME sub-segment of a Growth driven by aging US population and increasing volume of patients living with chronic diseases Growing demand for home-based care Increasing demand from payors & providers for value-based care model
Slide 25: Spotlight | P&HS Growing Our Product Portfolio
Spotlight | P&HS Growing Our Product Portfolio with Cross-Selling Opportunities Expanding into New Categories Increasing Pace of Product Launches 90% Active, multi-million-dollar investment in customer-centric category management Passive, supplier-centric product management FROM TO Of first wave exp
Slide 26: Integration to Enhance Value for All Parties
A Integration to Enhance Value for All Parties 3 Ostomy Urology Patients Providers Payors Suppliers Strengthens Patient Direct product offerings through expansion across a complementary portfolio Enables a more comprehensive home-based care service to patients through diversification and product adj
Slide 27: Diverse Earnings Profile Across Customers, Payors, Products and Geographies
Diverse Earnings Profile Across Customers, Payors, Products and Geographies + + = Combined Sales by Segment1 1 Combined numbers reflect the summation of OMI plus Rotech, for FY 2024. Diversification of revenue by product line and geography Limiting exposure to changes in the delivery of healthcare I
Slide 28: Low Leverage and Strong Cash Flow Generation
Low Leverage and Strong Cash Flow Generation ¹ Adj. EBITDA is a Non-GAAP measure and includes compliance EBITDA addbacks. For a reconciliation of Net Income, the most directly comparable GAAP measure, to Adj. EBITDA, see slides 41 and 43; ² Net Leverage Ratio = Net Debt/Adj. EBITDA. Leverage Expecte
Slide 29: Highly Experienced Management with Proven Track Record of Success
Highly Experienced Management with Proven Track Record of Success Years of experience Industry experience ED PESICKA President & Chief Executive Officer 25+ JON LEON EVP & Chief Financial Officer 25+ Perry Bernocchi EVP & Chief Executive Officer, Patient Direct 25+ ANDY LONG EVP & Chief Executive Of
Slide 30: Management Track Record: Byram, Halyard and Apria Acquisitions
1 Beginning benchmark year represents the first full financial year post-acquisition. Highly Experienced Management with Proven Track Record of Success (cont’d) Byram, Halyard and Apria acquisitions have diversified the business and strengthened OMI’s financial profile S&IP Business Acquired April 2
Slide 31: Integration Team and Value Capture Initiatives
Highly Experienced Management with Proven Track Record of Success (cont’d) Integration team Experienced integration team with a successful track record of well-coordinated integrations Value Capture Initiatives Experienced Integration Team Geographic Expansion Cost Savings Value Capture Initiatives
Slide 32: Conclusion
Conclusion 1 Favorable trends driving robust demand 5 Strong cash flow generation and disciplined balance sheet management 4 Diverse earnings profile across customers, payors, products and geographies 2 Wide reaching traditional distribution business with expansion in proprietary products 6 Experien
Slide 33: Financials
Financials Proprietary to Owens & Minor, Inc.
Slide 34: Owens & Minor Financial Performance
Owens & Minor Financial Performance Net Revenue Gross Profit Adj. EBITDA1 $mm $mm $mm Margin 15.5% 18.3% 20.6% 20.7% Margin 6.1% 6.7% 5.7% 5.4% Growth 15.4% 1.7% 3.8% 3.6% 1 Adj. EBITDA includes compliance EBITDA addbacks. For a reconciliation of Net Income, the most directly comparable GAAP measure
Slide 35: Rotech Financial Performance
Rotech Financial Performance Net Revenue Gross Profit Adj. EBITDA1 $mm $mm $mm Margin 60.0% 54.8% 52.9% 50.2% Margin 32.4% 33.0% 28.9% 27.3% Growth 20.8% 6.4% 16.5% N.M. 1 Rotech Adj. EBITDA includes O&M equivalent compliance EBITDA addbacks. Rotech Adj. EBITDA is not comparable to O&Ms Adj. EBITDA
Slide 36: Transaction Overview
Transaction Overview Proprietary to Owens & Minor, Inc.
Slide 37: Transaction Overview
Transaction Overview Transaction Overview Sources and Uses Pro Forma Capitalization Table as of 12/31/2024 Purchase price of $1.36 billion in cash Acquisition funded through new debt and existing cash: $800 million of New Term Loan B $600 million of New Other Secured Debt $17mm of existing cash Impl
Slide 38: Summary Terms – Senior Secured Term Loan B
Summary Terms – Senior Secured Term Loan B Borrower Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC, Barista Acquisition II, LLC, O&M Halyard Inc., Byram Healthcare Centers, Inc., Apria, Inc. (Same as Existing) Guarantors All material, wholly owned Restricte
Slide 39: Execution Timeline
Execution Timeline March 2024 Su M Tu W Th F Sa 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Timing Event March 20th Launch Term Loan B via Lender Call (10:00am ET) April 1st Commitments due Price and Allocate Term Loan B Thereafter Close and Fund Transaction K
Slide 40: Appendix
Appendix Proprietary to Owens & Minor, Inc.
Slide 41: OMI Bank Adjusted EBITDA Reconciliation
OMI Bank Adjusted EBITDA Reconciliation Note: Please refer to slide 42 for further information. Certain totals may not sum due to rounding. Proprietary to Owens & Minor, Inc.
Slide 42: Definitions of Non-GAAP Reconciliation Items
Definitions of Non-GAAP Reconciliation Items (1) Acquisition-related charges and intangible amortization includes one-time costs primarily related to the expected acquisition of Rotech during the year ended December 31, 2024 and one-time costs primarily related to the Apria acquisition during the ye
Slide 43: Rotech Bank Adjusted EBITDA Reconciliation
Rotech Bank Adjusted EBITDA Reconciliation Proprietary to Owens & Minor, Inc. Note: Please refer to slide 44 for further information. Certain totals may not sum due to rounding.
Slide 44: Rotech Definitions of Bank Adjusted EBITDA Addbacks
Rotech Definitions of Bank Adjusted EBITDA Addbacks Proprietary to Owens & Minor, Inc. (1) Share-based compensation represents non-cash expense incurred related to Rotech’s equity incentive plan. (2) One-time, non-recurring items primarily represent (i) transaction costs and third-party advisor fees
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