PR Newswire10.05.21
The home medical equipment market has transformed within recent years, owing to increase in prevalence of various chronic diseases across the globe. Home medical equipment are medical devices that offer safe, convenient, cost-effective, and suitable environment to patients within their home. Further, oxygen-related products in home medical equipment are gaining high adoption, due to significant increase in incidence of chronic obstructive pulmonary disease (COPD) worldwide. Numerous devices are used for patient care at home, for example, infusion pumps, wheelchair, apnea monitors, glucose meters, and cannula. For instance, glucose meters or glucometers are routinely used at home to assess the level of glucose in blood for diabetics. Further, new technologies such as needle-free diabetic care, medication administration equipment, and durable medical equipment, such as medical beds and lift chairs, propel the home medical equipment market growth. However, high cost associated with these devices is anticipated to hamper the growth of home medical equipment market. Active healthcare companies in the markets this week include Quipt Home Medical Corp., AdaptHealth Corp., Viemed Healthcare Inc., Amedisys Inc., and Apria Inc.
Actually, both the U.S. and global markets are projected to increase over the next several years. Reports from Allied Market Research predict the U.S. home medical equipment market will reach $20.41 billion by 2027 at a 5.6 percent compound annual growth rate (CAGR) and the global home medical equipment market size was valued at $30.54 billion in 2019, and is estimated to reach $56,45 billion by 2027, registering a CAGR of 6.1 percent from 2020 to 2027. Allied Market said "The growth of the global home medical equipment market is driven by the increase in incidence of chronic diseases and considerable rise in geriatric population across the globe. Furthermore, technological advancements in home care medical equipment such as smaller size, portability and ease to access contributes to the market growth. However, surge in concerns related to patient safety and difficulty in adapting to medical devices restrain the growth. The growth potential in the emerging economies of Asia-Pacific is expected to provide numerous opportunities for market expansion during the forecast period."
Earlier this year, Quipt Home Medical Corp. acquired three separate entities with combined operations in California, Missouri, Arkansas, and Mississippi, reporting combined unaudited trailing 12-month annual revenues of approximately $5.5 million, and Adjusted EBITDA (defined below) of $550,000 prior to integration. Quipt is undertaking an ongoing national expansion effort with the goal of economically growing its operating footprint to serve as a leader in respiratory homecare across the United States. Quipt has built out a significant infrastructure platform which is highly scalable and allows the opportunity for the Company to efficiently integrate acquired businesses resulting in meaningful cost synergies and revenue growth opportunities.
Quipt's acquisition approach generally targets companies that are either: (i) heavily respiratory weighted companies with gross revenue in the range of $5 to $20 million, and consistent annual EBITDA margins between 10 percent and 20 percent or more; (ii) sub $5 million revenue targets with the strategic goal of expanding its payer mix and expanding its geographical footprint across new states to be become a national DME provider; or (iii) targeting substantially larger opportunities that would be more meaningful in terms of revenue, EBITDA, active patient base, and geographical operating footprint.
Combining these newly acquired entities provides Quipt a pathway to grow into four new states (California, Missouri, Arkansas, and Mississippi). The combined entities will add six locations, over 10,000 active patients, important insurance contracts and decades of operating experience. Each business has a proven track record in the markets they serve and has diversified product mixes, which combined is comprised of 66 percent respiratory and 33 percent traditional DME. Quipt has immediate access to attractive new markets in which it intends to leverage its existing infrastructure to create significant cross selling and patient growth opportunities. In addition, the combined entities give Quipt the opportunity to add patients to Quipt's existing subscription-based resupply program, and Quipt expects to derive strong revenue synergies from this initiative. The combined entities have a diverse payor mix with no more than 10 percent in sales coming from any one particular payor source.
Amedisys has acquired regulatory assets that allow the company to conduct home healthcare operations in Westchester County, N.Y. Under the terms of the agreement, Amedisys acquires the right to operate certified home healthcare services in Westchester County, N.Y., and the Bronx. Amedisys will open a start-up care center to serve patients in the newly acquired service area, which provides access to 375,000 Medicare enrollees and 165,000 Medicare Advantage enrollees.
Actually, both the U.S. and global markets are projected to increase over the next several years. Reports from Allied Market Research predict the U.S. home medical equipment market will reach $20.41 billion by 2027 at a 5.6 percent compound annual growth rate (CAGR) and the global home medical equipment market size was valued at $30.54 billion in 2019, and is estimated to reach $56,45 billion by 2027, registering a CAGR of 6.1 percent from 2020 to 2027. Allied Market said "The growth of the global home medical equipment market is driven by the increase in incidence of chronic diseases and considerable rise in geriatric population across the globe. Furthermore, technological advancements in home care medical equipment such as smaller size, portability and ease to access contributes to the market growth. However, surge in concerns related to patient safety and difficulty in adapting to medical devices restrain the growth. The growth potential in the emerging economies of Asia-Pacific is expected to provide numerous opportunities for market expansion during the forecast period."
Earlier this year, Quipt Home Medical Corp. acquired three separate entities with combined operations in California, Missouri, Arkansas, and Mississippi, reporting combined unaudited trailing 12-month annual revenues of approximately $5.5 million, and Adjusted EBITDA (defined below) of $550,000 prior to integration. Quipt is undertaking an ongoing national expansion effort with the goal of economically growing its operating footprint to serve as a leader in respiratory homecare across the United States. Quipt has built out a significant infrastructure platform which is highly scalable and allows the opportunity for the Company to efficiently integrate acquired businesses resulting in meaningful cost synergies and revenue growth opportunities.
Quipt's acquisition approach generally targets companies that are either: (i) heavily respiratory weighted companies with gross revenue in the range of $5 to $20 million, and consistent annual EBITDA margins between 10 percent and 20 percent or more; (ii) sub $5 million revenue targets with the strategic goal of expanding its payer mix and expanding its geographical footprint across new states to be become a national DME provider; or (iii) targeting substantially larger opportunities that would be more meaningful in terms of revenue, EBITDA, active patient base, and geographical operating footprint.
Combining these newly acquired entities provides Quipt a pathway to grow into four new states (California, Missouri, Arkansas, and Mississippi). The combined entities will add six locations, over 10,000 active patients, important insurance contracts and decades of operating experience. Each business has a proven track record in the markets they serve and has diversified product mixes, which combined is comprised of 66 percent respiratory and 33 percent traditional DME. Quipt has immediate access to attractive new markets in which it intends to leverage its existing infrastructure to create significant cross selling and patient growth opportunities. In addition, the combined entities give Quipt the opportunity to add patients to Quipt's existing subscription-based resupply program, and Quipt expects to derive strong revenue synergies from this initiative. The combined entities have a diverse payor mix with no more than 10 percent in sales coming from any one particular payor source.
Amedisys has acquired regulatory assets that allow the company to conduct home healthcare operations in Westchester County, N.Y. Under the terms of the agreement, Amedisys acquires the right to operate certified home healthcare services in Westchester County, N.Y., and the Bronx. Amedisys will open a start-up care center to serve patients in the newly acquired service area, which provides access to 375,000 Medicare enrollees and 165,000 Medicare Advantage enrollees.
