US-based home medical equipment (HME) provider AdaptHealth announced it has signed a definitive agreement to acquire the Patient Care Solutions (PCS) business from McKesson Corporation. The agreement still needs to go through typical closing conditions and is expected to be finalized in December 2019. AdaptHealth strengthens its geographic footprint while also expanding its product portfolio, ‘adding urological and ostomy products to our already comprehensive HME product portfolio, and significantly increase our exposure in areas such as wound care, breast pumps, incontinence supplies, and diabetic care.’
AdaptHealth CEO Luke McGee believes the addition of PCS’s products will double the organization’s addressable market.
We should expect PCS’s business to be fully integrated on AdaptHealth’s platform towards the end of 2020, with a total investment cost of $30 million, including restructuring costs. PCS generated net revenues of approximately $134 million for the year ending October 31, 2019.
In connection with the acquisition, AdaptHealth will enter into a supply and distribution agreement with McKesson Corporation concerning PCS’s HME service lines. Josh Pames, President and COO of AdaptHealth, added in the release that “the acquisition of PCS complements our existing PAP (sleep) resupply offering and will allow us to provide an expanded set of supplies to both the current customers of PCS and AdaptHealth.”
AdaptHealth has acquired six companies since July 2019 and 56 companies since 2012. The company recently went public and is listed on the NASDAQ under AHCO. The company has a market cap of $363 million with earnings per share (EPS) sitting at $0.02 as of November 27, 2019.
About AdaptHealth Corp.
AdaptHealth Corp. is the third-largest home medical equipment company in the US. AdaptHealth provides a full suite of medical products and solutions designed to help patients manage chronic conditions in the home, adapt to life and thrive. AdaptHealth provides medical products for both rental and sale. It focuses on respiratory and/or mobility equipment, including CPAP sleep equipment, oxygen equipment, wheelchairs, walkers, and hospital beds. AdaptHealth also provides custom bracing services, hospice-focused HME services, wound therapy, and nutritional HME services. Learn more at www.adapthealth.com.
About McKesson Corporation
McKesson’s vision is to improve care in every setting – one product, one partner, one patient at a time. McKesson believes higher-quality care comes when health organizations across settings are truly healthy. McKesson provides the products, technology, and resources needed to operate more effectively, lower costs, and improve patient health. Learn more at www.mckesson.com.
About Patient Care Solutions
The Patient Care Solutions (PCS) business provides access to medical supplies, insurance payers, distribution services and technology to better serve customers. PCS’s product portfolio includes wound care supplies, ostomy supplies, urological supplies, diabetic care supplies, breast pumps and more.