PROTECH ENTERS FLORIDA WITH ACCRETIVE ACQUISITION OF MAYHUGH’S MEDICAL EQUIPMENT $7 MILLION IN ANNUALIZED REVENUES, IN EXCESS OF 15% ADJUSTED EBITDA MARGIN AND INCREASES PROTECH’S ACTIVE PATIENT COUNT BY MORE THAN 10,000
5,000 PATIENTS TO IMMEDIATELY ENTER PROTECH’S
SUBSCRIPTION RE-SUPPLY PLATFORM
Cincinnati, Ohio – February
2, 2021 – Protech Home Medical Corp. (“Protech” or the “Company”) (TSXV: PTQ), (OTCQX: PTQQF), a U.S. based
leader in the home medical equipment industry, focused on end-to-end
respiratory care, is pleased to announce that it has acquired Mayhugh’s Medical
Equipment (“MME”), a company based
in Florida, reporting unaudited trailing 12-month annual revenues of
approximately $7 million, Adjusted EBITDA (defined below) of $1.2 million, and
positive net income.
Acquisition Details
Excluding the impact of future
acquisitions, and organic growth derived from continuing operations, we are
pleased to share the following selected financial and operating metrics for
Protech following the closing of the acquisition of MME:
·
Run-Rate Revenue of
$130-$135 million;
·
Run-Rate Adjusted
EBITDA of $26-$30 million;
·
120,000 current
active patients;
·
17,000 unique
referrals; and
·
49 locations across
11 U.S. States.
MME is a leader in
the respiratory home care services industry in Northern Florida and will add
over 10,000 active patients to Protech’s patient population. Furthermore, MME
represents Protech’s entrance into its 11th U.S. State with its 49th
location. MME gives Protech immediate access to Jacksonville, an attractive
metro hub in which it will leverage its existing infrastructure to create
significant cross selling and patient growth opportunities. The MME management
team has successfully transitioned MME from a relatively small medical
equipment company to a clinical respiratory company with its product mix at
over 85% respiratory, possessing a large selection of respiratory and home
medical equipment to meet the needs of today's patients at home. The staff delivers
on a high touch service model, aligned with Protech’s existing model, and is
continually educating their patient base to ensure strong compliance of
equipment. In addition, MME gives Protech the ability to immediately add over
5,000 patients from its patient base to Protech’s existing subscription-based
resupply program and Protech expects to derive strong revenue synergies from
this initiative.
MME has a diverse
payor mix with no more than 50% coming from a particular payor source.
Under the terms of the
definitive purchase agreement, Protech acquired MME for total consideration of
approximately $5.8 million. Post integration, it is expected that MME will
increase Protech’s annual revenues by approximately $7 million and Adjusted
EBITDA by $1.4 to $1.8 million. Leveraging existing infrastructure and payor
contracts, Protech expects
to achieve additional revenue generated from organic growth, cross
selling and corporate synergies.
Management Commentary
“We are delighted to
close on the acquisition of MME, which provides us with a solid foundation from
which to grow in the State of Florida, representing a major milestone for our
company,” said Greg Crawford, Chairman and CEO of Protech. “We are excited to
add another turn-key respiratory home care operator to our family of companies,
with MME being a logical fit for Protech. We expect a smooth integration
process and will move quickly to capture the tremendous amount of synergies,
beginning with adding 5,000 patients to our subscription re-supply model, which
will provide an immediate revenue driver for us. MME is immediately accretive,
similar to our deep pipeline of potential acquisition targets, which we expect
to be very busy moving through the funnel in the months to come.”
Chief Financial
Officer, Hardik Mehta added, “MME’s heavily weighted respiratory product mix,
and diversification of the payor mix, provides Protech with a stable foundation
to start its Florida operations. We are excited to have the opportunity to
penetrate the attractive Jacksonville market and have already begun the
integration process. We will look to grow our scale in Florida both organically
and through strategic bolt-on opportunities that present themselves. We believe
MME is just the beginning of what will be an aggressive acquisition pace for us
over the remainder of 2021, including potential larger revenue opportunities as
we look to accelerate our scale beyond the current run-rate revenue we have.”
The
Company had originally announced a non-binding letter of intent with MME on
January 5, 2021.