Option Care Health, Inc. · NASDAQ:OPCH
Option Care Health — BioScrip — Merger or Acquisition (May 2019)
26 slides from Option Care Health's merger presentation, May 2, 2019
Slide 1: Creating the Leading Home Infusion Company
CREATING THE LEADING HOME INFUSION COMPANY BIOSCRIP, INC. INVESTOR PRESENTATION May 2019 NASDAQ: BIOS
Slide 2: Disclaimer
DISCLAIMER INVESTOR PRESENTATION // 2 This communication, in addition to historical information, contains “forward - looking statements” (as defined in the Private Securities Litigation Reform Act of 1995 ) regarding, among other things, future events or the future financial performance of BioScrip
Slide 3: Presenters
INVESTOR PRESENTATION // 3 PRESENTERS John Rademacher CEO Option Care Mike Shapiro CFO Option Care Dan Greenleaf CEO BioScrip Steve Deitsch CFO BioScrip Headquar te r s: Denver , Colorado Headquar te r s: Bannockburn , Illinois
Slide 4: The Leading Home Infusion Company
INVESTOR PRESENTATION // 4 • BioScrip and Option Care Merger Announced March 15, 2019 ‒ Creates the #1 provider of home and alternate site infusion therapy services 1 ‒ Powerful value creation potential, with cost synergies alone exceeding $60 million annualized ‒ The only pure - play, independent,
Slide 5: Key Transaction Terms
BIOSCRIP + OPTION CARE: KEY TRANSACTION TERMS INVESTOR PRESENTATION // 5 • BioScrip to issue common stock to Option Care in an all - stock transaction • $60+ million of high - confidence run - rate cost synergies identified • BioScrip shareholders: 20.5% • Option Care shareholders: 79.5% • Chief Exe
Slide 6: Combination at a Glance
BIOS Standalone Pro - Forma with Option Care U.S. Home Infusion Market Share 1 #4 #1 # of States with Service Locations 27 46 % of U.S. Population within Service Area 72% 96% # of Unique Patients Served (2018) ~200,000 ~375,000 # of Clinicians ~1,100 ~2,900 # of Full Service Pharmacies 52 128 # of A
Slide 7: #1 Position in a Large and Growing Market
$100 B $12 B $2.6 B BIOSCRIP + OPTION CARE: #1 POSITION IN A LARGE AND GROWING MARKET 1 INVESTOR PRESENTATION // 7 BioScrip/Option Care Largest independent provider and only publicly - traded “pure play” U.S. Home Infusion Market Lowest - cost setting; growing penetration of overall market U.S. Infu
Slide 8: U.S. Infusion Market Overview
1% 6% 10% 17% 21% 45% U.S. INFUSION MARKET OVERVIEW 1 INVESTOR PRESENTATION // 8 U.S. Infusion Market U.S. Competitive Landscape – Home 12% 20% 28% 40% $100B Hospital Physician Office Outpatient Skilled Nursing Facility Home / $12B ; Top 5 providers account for approximately half of the U.S. market
Slide 9: On the Right Side of Healthcare Trends
…to the Home • Lowest cost site of care • Safest site of care; lower risk of infection • Patient preference, empowerment, quality of life • Healthcare reform moving from fee - for - service to fee - for - outcomes • The home is becoming the general ward • Democratization of healthcare (physical, men
Slide 10: Proven, Experienced Leadership
PROVEN, EXPERIENCED LEADERSHIP INVESTOR PRESENTATION // 10 John Rademacher Chief Executive Officer Mike Shapiro Chief Financial Officer o Nearly two decades of experience in the healthcare industry, successfully deploying technology solutions and expanding professional services capabilities o Joined
Slide 11: Power of the Combination - Competitive Advantages
POWER OF THE COMBINATION - COMPETITIVE ADVANTAGES INVESTOR PRESENTATION // 11 x Only independent national provider with singular focus on full spectrum of infusion therapies x Broadest commercial and clinical coverage to address patient needs with largest footprint of infusion suites x Embedded sale
Slide 12: The Only Scaled and National Independent Provider
BIOSCRIP + OPTION CARE: THE ONLY SCALED AND NATIONAL INDEPENDENT PROVIDER INVESTOR PRESENTATION // 12 Captive Independent Captive Payors Leading Home Infusion Providers Value of Independence: • Logical preferred partner for non - vertically integrated payors • Productive, in - network relationships
Slide 13: Complementary Footprint
BIOSCRIP + OPTION CARE: COMPLEMENTARY FOOTPRINT INVESTOR PRESENTATION // 13 National Reach Makes the Combined Company a Logical Partner to Payors 1. Includes pharmacy technicians. $2.6bn+ combined 2018 revenue 46 states 96% of U.S. population covered 2,900+ skilled clinicians 1 Top 10 payors all in
Slide 14: Complementary, Synergistic Portfolios
• Acute and Chronic Therapy Focus ‒ Similar to BioScrip, Option Care provides profitable acute (ex. anti - infectives, nutrition, etc.) and chronic therapies (immunoglobulin, factor, Remicade, etc.) INVESTOR PRESENTATION // 14 BIOSCRIP + OPTION CARE: COMPLEMENTARY, SYNERGISTIC PORTFOLIOS • Limited D
Slide 15: Pipeline for LDD Opportunities Continues to Expand
0 5 10 15 20 2019 2020 2021 PIPELINE FOR LDD OPPORTUNITIES CONTINUES TO EXPAND INVESTOR PRESENTATION // 15 Estimated Pipeline of Home Infusion Drugs Coming to Market Products Anticipated to Launch in Remaining 2019 Products Anticipated to Launch in 2020 Products Anticipated to Launch in 2021 • Incre
Slide 16: Payor Diversity and Low Pen-Stroke Risk
BIOSCRIP + OPTION CARE: PAYOR DIVERSITY AND LOW PEN - STROKE RISK INVESTOR PRESENTATION // 16 14% 86% Pro Forma Revenue By Payor Type 1 Commercial Government No Single Payor Relationship Accounts for >15% of Pro Forma Sales 1 Commercial includes Medicare Advantage, Managed Medicaid and Patient Pay
Slide 17: Combining Two Strong Businesses
$5 $45 $45 2016 2017 2018 BIOSCRIP + OPTION CARE: COMBINING TWO STRONG BUSINESSES INVESTOR PRESENTATION // 17 $1,647 $1,782 $1,942 2016 2017 2018 Adjusted EBITDA (in mm) 3 $72 $84 $95 2016 2017 2018 1 Excludes approximately $24 million of Revenue and Adjusted EBITDA in 2016 to normalize 2016 results
Slide 18: Q1 2019 Financial Highlights
BIOSCRIP + OPTION CARE: Q1 2019 FINANCIAL HIGHLIGHTS INVESTOR PRESENTATION // 18 Adjusted EBITDA (in mm) • On day - rate basis, BioScrip and Option Care revenue growth of 8% and 5%, respectively • Both companies on track to deliver on full year expectations Net Revenue (in mm) Adjusted EBITDA (in mm
Slide 19: Home Health Peers
HOME HEALTH PEERS INVESTOR PRESENTATION // 19 Key Home Health Industry Players $ in milli o ns 2018 Revenue $518 $4,277 $1,663 $1,783 $1,810 2020 Revenue $635 $4,781 $2,091 $2,006 $2,227 ’18 - 20 CAGR 10.7% 5.9% 12.2% 5.9% 11.2% 9.2% 2 01 8 E B IT D A $44 $901 $181 $306 $162 (1) 2 020 E B IT D A $58
Slide 20: Attractive Fundamentals, Discount to Peer Group
INVESTOR PRESENTATION // 20 • Combined company reported Adjusted EBITDA of $140 million in 2018 • Targeting 2020 pro forma Adjusted EBITDA of at least $250 million, including $60 million of pro forma run - rate synergies 1 • Mid - to high - single digit revenue growth profile • Organic Adjusted EBIT
Slide 21: High Confidence Net Cost Synergies Totaling $60+ Million
BIOSCRIP + OPTION CARE: HIGH CONFIDENCE NET COST SYNERGIES TOTALING $60+ MILLION 1 INVESTOR PRESENTATION // 21 ; Streamline corporate and administrative functions including labor and non - labor costs SG&A $35 - 40mm (gross) ; Optimize assets where applicable to best serve the market ; Includes asso
Slide 22: Potential Additional Value Creation
BIOSCRIP + OPTION CARE: POTENTIAL ADDITIONAL VALUE CREATION INVESTOR PRESENTATION // 22 • Revenue opportunities excluded from $60mm cost synergies estimate • Potential upside through: ‒ 600 member sales force with optimized coverage by location; ‒ Cross - selling solution sets, such as Option Care’s
Slide 23: Investing for Integration Success
BIOSCRIP + OPTION CARE: INVESTING FOR INTEGRATION SUCCESS INVESTOR PRESENTATION // 23 Pre - Signing Sign to Close Post - Close Deep due diligence and granular quantification of savings • Engaged multiple experienced third party advisors to conduct a series of clean room - based analyses • Quantified
Slide 24: Improved Pro-Forma Capital Structure
BIOSCRIP + OPTION CARE: IMPROVED PRO - FORMA CAPITAL STRUCTURE INVESTOR PRESENTATION // 24 ; Significant deleveraging ; No near - term maturities ; Lower cost of capital ; No preferred equity ; Covenant - lite ; Significant additional liquidity ; ABL revolver for additional capital flexibility Pro F
Slide 25: The Power of the Combination
BIOSCRIP + OPTION CARE: THE POWER OF THE COMBINATION INVESTOR PRESENTATION // 25 #1 home infusion company with national reach and scale Right side of healthcare – independent, low cost care setting, patient centric Enhanced product and payor diversity Sizable and actionable synergies expected Improv
Slide 26: Kalle Ahl, CFA (212) - 9614 kahl@equityny.com Devin Sullivan (212) 836 - 9608 dsullivan@equityny.com
INVESTOR PRESENTATION // 26 Kalle Ahl, CFA (212) 836 - 9614 kahl@equityny.com Devin Sullivan (212) 836 - 9608 dsullivan@equityny.com Stephen Deitsch , Chief Financial Officer and Treasurer (720) 697 - 5200 stephen.deitsch@bioscrip.com