AdaptHealth acquires Aerocare Holdings for $2B and raises FY2021 outlook

Dec. 01, 2020 6:39 AM ETAdaptHealth Corp. (AHCO)By: Niloofer Shaikh, SA News Editor
  • AdaptHealth (NASDAQ:AHCO) has acquired Orlando, Florida based AeroCare Holdings for $2B, comprising of $1.1B in cash and 31M shares.
  • Founded in 2000, AeroCare is a leading national technology-enabled respiratory and home medical equipment distribution platform in the United States and offers a comprehensive suite of direct-to-patient equipment and services including CPAP and BiPAP machines, oxygen concentrators, home ventilators, and other durable medical equipment products.
  • AdaptHealth intends to fund the cash portion of the consideration and associated costs through incremental debt and has committed debt financing from Jefferies Finance LLC.
  • The combined company will operate under the name AdaptHealth, and Luke McGee, CEO of AdaptHealth, and Steve Griggs, CEO of AeroCare, will jointly lead the company as Co-CEOs. Josh Parnes will continue to serve as President.
  • The acquisition is expected to close in 1Q21 and estimated $50M run-rate cost synergies.
  • The company reaffirmed FY2020 guidance of Revenue $1B-1.04B vs. consensus of $1.03B and Adjusted EBITDA $186M-194M vs. consensus of $180.7M and increased FY2021 outlook for net revenue from a range of $1.30B-$1.40B to a range of $2.05B-$2.20B vs. consensus of $1.37B, Adjusted EBITDA from a range of $260M-$280M to a range of $480M-$515M vs. consensus of $259M and Adjusted EBITDA less Patient Equipment Capex from a range of $180M-$200M to a range of $300M-$330M.

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