AdaptHealth hits the NASDAQ

‘They came up with a buy-and-build strategy and executed on it’
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Friday, November 15, 2019

PLYMOUTH MEETING, Pa. – In the nearly 10 years that the HME industry has grappled with competitive bidding, AdaptHealth has found a way to grow, leading up to the provider becoming a public company last week.

AdaptHealth Holding Corp., the result of a merger with DFB Healthcare Acquisitions, is now listed on the NASDAQ under a new ticker symbol, AHCO. At press time on Friday, it had a market capitalization of about $250 million and was trading at just under $9 per share.

“Adapt is already huge,” said Brad Smith, managing director/partner at Vertess, of the company, which serves more than 1 million patients annually through more than 150 locations across the country. “They came up with a buy-and-build strategy, and executed on it and I think it’s going to go extremely well going forward.”

AdaptHealth reported its first financial results last week, posting net revenues of $136.5 million and net sales of $83.1 million for the third quarter ended Sept. 30, an increase of 33.6% and 44.5%, respectively.

AdaptHealth has acquired six companies since July of this year and 56 companies since 2012, including Landauer Metropolitan in 2013 for $22 million ahead of that company’s filing for Chapter 11 bankruptcy protection.

“They took advantage of an industry that was beaten down by reimbursement rates,” said Pat Clifford, managing director, The Braff Group. “They felt like they could improve things with operational efficiencies and they’ve done quite well.”

Going forward, AdaptHealth will continue to buy. It says it has identified a “significant volume” of potential acquisition opportunities for this year and early next year, with PAP and ventilators likely areas of focus, Smith says.

“The market is brimming right now,” he said. “From the standpoint of further market penetration, there’s plenty to go after.”

AdaptHealth’s size and its merger with DFB sets up the company well for the not-so-distant Round 2021, Clifford says.

“If the next round is upward (reimbursement), for which we are all hopeful, then I think they are very well-positioned,” he said.

A spokesman for DFB said the company couldn’t comment ahead of the deal closing some time in the fourth quarter.