Adapthealth Corp. · NASDAQ:AHCO
Adapthealth — Merger or Acquisition (December 2020)
21 slides from Adapthealth's merger presentation, Dec 1, 2020
Slide 1: Investor Presentation December 1, 2020
Investor Presentation December 1, 2020
Slide 2: Disclaimers and Other Important Information
Disclaimer Disclaimers and Other Important Information This presentation (this “Presentation”) is for informational purposes only and has been prepared to assist interested parties in making their own evaluation with respect to a potential investment in AdaptHealth Corp. (“AdaptHealth” or the “Compa
Slide 3: Transaction Summary
Transaction Summary Purchase Consideration $1.1 billion in cash 31 million common shares valued at $926 million as of November 30, 2020(1) Leadership & Governance President: Josh Parnes (President of AdaptHealth) CFO: Jason Clemens (CFO of AdaptHealth) Steve Griggs and shareholder designee Ted Lundb
Slide 4: AeroCare Overview
AeroCare Overview Other 11% HME 11% Sleep 47% Respiratory 31% 995,000+ active patients 3,500+ employees 200+ sales professionals 155 completed acquisitions Founded in 2000; HQ in Orlando, FL Historical Revenue Growth ($mm) Payor Mix (LTM 9/30/20) Other 4% $654 $536 $387 $290 $227 FFS Medicaid 6% Pat
Slide 5: Strategic Rationale
Strategic Rationale Leading Independent HME Provider with Significantly Enhanced Scale and Geographic Reach Combination of Two Industry Leading Technology Platforms Financially Compelling – Highly Accretive Transaction Multiple Pathways for Future Growth, Including Additional Acquisitions in a Highl
Slide 6: Significant and immediate accretion to growth, earnings and cash flows
(1) 2021 guidance; $ millions AdaptHealth’s acquisition of AeroCare will create shareholder value through significant and immediate accretion to growth, earnings and cash flows Note: PC = Patient Capex
Slide 7: Leading Independent HME Provider with Significantly Enhanced Scale and Geographic Reach
Leading Independent HME Provider with Significantly Enhanced Scale and Geographic Reach Highly complementary footprint with expansion into fast-growing Southeastern geographies
Slide 8: Expands Footprint into Attractive Fast-Growing Geographies
Expands Footprint into Attractive Fast-Growing Geographies AeroCare TTM August 2020 Total Revenue by State AeroCare TTM August 2020 Same Store Growth by State(1) State Growth(2) TN 13% CO 10% FL 14% TX 9% GA 7% SC 3% Other 43% Tennessee14% Colorado4% Texas16% Georgia19% South Carolina18% Other9% 12%
Slide 9: Pro Forma Unique Patients Serviced
Pro Forma Unique Patients Serviced Patients in thousands on a rolling TTM basis 1,4621,535 603 573 588 2,142 827 759 710 647 902 883 2,775 995 795 874 932 1,113 1,177 1,249 1,315 1,576 1,601 1,780 Q2'18Q3'18Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20 Patients will gain greater managed care access and b
Slide 10: Pro forma business mix by product category
Diabetes 17% Respiratory 19% Sleep 38% HME 11% Based on LTM September 2020A (1) Other 5% Supplies to Home 13% Sleep 33% HME 11% Respiratory 11% Diabetes 27% Other 11% HME 11% Sleep 47% Respiratory 31% Other 7% Supplies to Home 8% Combined company will be positioned as a leader in large, growing addr
Slide 11: Pro Forma Payor Mix
Pro Forma Payor Mix Based on LTM September 2020A (1) (1) Managed Medicaid 6% FFS Medicaid 7% Patient 11% Other 7% Commercial 42% Managed Medicaid 5% FFS Medicaid 6% Patient 12% Other 4% Commercial 28% Managed Medicaid 6% FFS Medicaid 7% Patient 11% Other 6% Commercial 37% Managed Medicare 6% FFS Med
Slide 12: Combination of Two Industry Leading Technology Platforms
Combination of Two Industry Leading Technology Platforms Both AdaptHealth and AeroCare utilize a fully integrated, centralized technology platform + Electronic portal / interface + Proprietary workflow technology + Improved efficiency + Significantly enhanced ease of use for all stakeholders + Impro
Slide 13: Building on Our Track Record of Successful Acquisitions
Building on Our Track Record of Successful Acquisitions Transactions Closed Since Inception 84 155 Transactions Closed (2017 – YTD 2020) 64 50 Both companies have a similar philosophy of acquisitions and integration with substantial runway for future acquisitions of smaller HME companies and regiona
Slide 14: Identifiable and Achievable Cost Synergies and Meaningful Additional Upside
Identifiable and Achievable Cost Synergies and Meaningful Additional Upside $50 million estimated pre-tax run-rate annual synergies Potential Cost Synergies + Direct and Indirect Spend + Branch Consolidation + Technology Additional revenue synergies not included in forecast + PAP 90-day compliance +
Slide 15: Long-Term Targets
Long-Term Targets Organic Revenue Growth 8% to 10% Acquired Revenue $100 to $150mm annually Business Mix Sleep: ~40% Diabetes: ~30% All Other: ~30% Adj. EBITDA Margin 23% to 25% Adj. EBITDA Less Patient CapEx Margin 15% to 17% Combination with AeroCare accelerates growth and expands margins
Slide 16: Pro Forma Capitalization Overview
Pro Forma Capitalization Overview New debt used to finance cash consideration of the purchase price, backstop and/or refinance existing Term A and pay transaction fees: + Existing bond to remain in place, due 2028 + $1.35bn committed financing package Pro forma capital structure strategy: + No near
Slide 17: Pro Forma Share Count Information
Pro Forma Share Count Information (in thousands)Common StockWarrants Class AClass B Adapt’s Board has approved eliminating the Up-C corporate structure at the closing of the AeroCare acquisition(4) Steps: + Eliminate the two class share structure + Exchange AdaptHealth Holdings LLC interests and Cla
Slide 18: Key Highlights in Summary
Key Highlights in Summary Leading Independent HME Provider with Significantly Enhanced Scale and Geographic Reach Combination of Two Industry Leading Technology Platforms Financially Compelling – Highly Accretive Transaction Multiple Pathways for Future Growth, Including Additional Acquisitions in a
Slide 19: Appendix
Appendix
Slide 20: Recent Acquisition: NE Home Medical
Recent Acquisition: NE Home Medical High growth direct-to-patient distributor of diabetes supplies 3,900+ CGM patients 2,000+ insulin delivery patients Primarily commercial insurance Founded in 2015; HQ in Chelmsford, MA Significant opportunity to expand in New England and adjacent markets Establish
Slide 21: Thank You
Thank You