Adapthealth Corp. · NASDAQ:AHCO
Adapthealth — Merger or Acquisition (December 2020)
21 slides from Adapthealth's merger presentation, Dec 1, 2020
Slide 1: Investor Presentation
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 ▪ AdaptHealth to acquire AeroCare for approximately $2.0 billion Purchase ‒ $1.1 billion in cash Consideration ‒ 31 million common shares valued at $926 million as of November 30, 2020(1) ▪ Co-CEOs: Luke McGee (CEO of AdapthHealth) and Steve Griggs (CEO of AeroCare) ▪ President:
Slide 4: AeroCare Overview
AeroCare Overview Company Snapshot Product Mix (LTM 9/30/20) Leading, high growth technology-enabled Other respiratory therapy distribution platform 11% HME ▪ 995,000+ active patients 11% Sleep ▪ 3,500+ employees 47% ▪ 200+ sales professionals Respiratory ▪ 155 completed acquisitions 31% ▪ Founded i
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: Highly Accretive Transaction
Highly Accretive Transaction 2021 guidance; $ millions (1) Revenue $1,300 to $1,400 $2,050 to $2,200 Organic Revenue Growth 7% to 10% 8% to 10% Adj. EBITDA $260 to $280 $480 to $515 Adj. EBITDA Margin 20% 23% Adj. EBITDA – PC $180 to $200 $300 to $330 Adj. EBITDA – PC Margin 14% 15% AdaptHealth’s ac
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 6
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 CO 13% 10% Florida 12% TX FL 9% Tennessee 14% 14% GA Colorado 4% 7% SC Texas 16% 3% Georgia 19% Other South Carolina 18
Slide 9: Pro Forma Unique Patients Serviced
Pro Forma Unique Patients Serviced Patients in thousands on a rolling TTM basis 2,775 2,484 2,478 2,142 995 2,008 1,887 883 902 1,760 1,535 827 1,462 759 1,368 710 647 588 603 573 1,780 1,601 1,576 1,177 1,249 1,315 1,113 795 874 932 (1) Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Pa
Slide 10: Pro Forma Product Mix
Pro Forma Product Mix Based on LTM September 2020A (1) (1) Other Other Other 7% 5% 11% Supplies to Home Supplies to Home 8% 13% Sleep HME 33% 11% Sleep HME 38% HME 11% Sleep 11% 47% Respiratory Respiratory 11% Respiratory 19% 31% Diabetes Diabetes 27% 17% Combined company will be positioned as a lea
Slide 11: Pro Forma Payor Mix
Pro Forma Payor Mix Based on LTM September 2020A (1) (1) Other 4% Other Other 7% 6% Patient Patient Patient Managed 12% 11% 11% Managed Medicaid Managed 5% Commercial Medicaid Medicaid 28% 6% 6% Commercial Commercial FFS 37% 42% Medicaid FFS FFS 6% Medicaid Medicaid 7% 7% Managed Managed Medicare Me
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 + RCM and Branch Support + Direct and Indirect Spend $50 million Potential Cost estimated pre-tax + Branch Consolidation run-rate annual Synergies synergies + Technology + G&A + PAP 90-day compliance Additional + PAP resuppl
Slide 15: Long-Term Targets
Long-Term Targets Organic Revenue Growth 8% to 10% Acquired Revenue $100 to $150mm annually Sleep: ~40% Business Mix Diabetes: ~30% All Other: ~30% Adj. EBITDA Margin 23% to 25% Adj. EBITDA Less Patient 15% to 17% CapEx Margin Combination with AeroCare accelerates growth and expands margins 14
Slide 16: Pro Forma Capitalization
Pro Forma Capitalization Overview Pro Forma Capitalization ($mm) New debt used to finance cash consideration of the purchase price, backstop and/or refinance Cash(1) $97 existing Term A and pay transaction fees: Total Debt $1,865 + Existing bond to remain in place, due 2028 9/30/20 Net Debt / LTM PF
Slide 17: Pro Forma Share Count Information
Pro Forma Share Count Information (in thousands) Common Stock Warrants Class A Class B Number of shares outstanding at September 30, 2020 81,037 (1) 25,875 4,281 Equity issued in connection with acquisitions 1,087 - - Class B exchanges 2,284 (2,284) - Equity-based compensation activity 120 - - Numbe
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 Company Snapshot Strategic Rationale High growth direct-to-patient distributor of ✓ Significant opportunity to expand in New England and diabetes supplies adjacent markets ▪ 3,900+ CGM patients ✓ Establishes AdaptHealth with key Massachusetts payor contracts in cl
Slide 21: Thank You
Thank You + 1