Combination expands Agiliti’s end-to-end
service offering to customers, strengthening capabilities in
high-demand specialty equipment services
- Complementary product and operational capabilities broaden
offering within growing specialty beds, surfaces and mobility
equipment market
- Builds on Agiliti’s nationwide footprint and logistics
infrastructure, increasing local market presence and creating
cross-selling opportunities
- All-cash, stock purchase transaction valued at $230
million
- Expected to generate $5 million annual cost synergies in the
first year, growing to $15 million by year three
Agiliti, Inc. (NYSE: AGTI) (“Agiliti” or “the Company”), an
essential service provider to the U.S. healthcare industry, today
announced that it has entered into a definitive agreement to
acquire Sizewise Rentals, LLC, (“Sizewise”), a manufacturer and
distributor of specialty hospital beds, surfaces and patient
handling equipment, in a stock purchase transaction valued at $230
million or approximately 7.7x Adjusted EBITDA for the twelve months
ended June 30, 2021. Agiliti intends to finance the transaction
through a combination of cash and debt. The Boards of Directors of
both companies have unanimously approved the agreement. Subject to
the satisfaction of customary closing conditions, the transaction
is expected to close early in the fourth quarter of 2021. Following
the close of the transaction, Agiliti will provide an update to its
full year 2021 financial guidance at the time it reports quarterly
results for the period ending September 30, 2021.
Sizewise is a leading manufacturer and provider of specialized
bed frames, therapeutic surfaces and mobility equipment serving
more than 3,000 customers in the acute and post-acute care markets
with products that address the needs of bariatric, geriatric,
pediatric and standard patient populations. For the twelve months
ended June 30, 2021, the business generated revenues of $155
million and Adjusted EBITDA of $30 million, inclusive of an
estimated benefit from COVID-19 of approximately $5 million in
Adjusted EBITDA. Sizewise is headquartered in Kansas and operates a
24/7 nationwide network of 65 local, in-market service branches and
four manufacturing centers.
“We are pleased to welcome the Sizewise team and their customers
to Agiliti and are excited about merging our best-in-class
portfolios of product and service offerings,” said Tom Leonard, CEO
of Agiliti. “The acquisition of Sizewise is a perfect example of
our ‘overlap and extend’ approach to M&A. The combination
builds on our existing geographic footprint and adds relevant scale
to our Equipment Solutions service line, while simultaneously
expanding our capabilities to bring differentiated products and
services to market for our customers.”
Strategic Rationale
The combination enables Agiliti to broaden its portfolio and
clinical expertise within the growing specialty equipment services
market, expand its total addressable market opportunity and target
meaningful growth and cost reduction synergies.
The company believes the transaction provides several key
benefits:
Builds on Agiliti’s unique, at-scale
infrastructure, optimizing the companies’ complementary
distributed operations networks—including facilities, vehicles,
staff, products and operating systems—which will help increase
local market presence and support meaningful operating
synergies.
Strengthens Agiliti’s capabilities in the
supply chain, permitting greater control over R&D,
manufacturing and logistics for a vital and differentiated product
category.
Expands Agiliti’s value proposition
with the exceptional market reputation and deep expertise that
Sizewise is known for, to further address the clinical needs of
bariatric patients and those at risk of skin and fall injury.
Aligns with Agiliti’s proven, end-to-end
service model, providing best-in-class, high-utilization
devices delivered within a comprehensive service framework.
“Sizewise has spent the past 25 years engineering,
manufacturing, and selling products and service solutions that
drive value for our healthcare partners,” said Brian Frickey, CEO
of Sizewise. “We’re pleased to put that history and experience to
work for Agiliti as the combined company continues to be an
invaluable source of equipment solutions for caregivers and
patients alike.”
Advisors
Cozen O’Connor is serving as legal advisor to Agiliti. Orrick is
serving as legal advisor to Sizewise.
About Agiliti, Inc.
Agiliti, Inc., is an essential service provider to the U.S.
healthcare industry with solutions that help support a more
efficient, safe and sustainable healthcare delivery system. Agiliti
serves more than 7,000 national, regional and local acute care and
alternate site providers across the U.S. For more than eight
decades, Agiliti has delivered medical equipment management and
service solutions that help healthcare providers reduce costs,
increase operating efficiencies and support optimal patient
outcomes. More information is available at
www.agilitihealth.com.
About Sizewise
Sizewise is a privately owned, global medical equipment
manufacturer with more than 25 years engineering innovative
products to meet the needs of bariatric, geriatric, pediatric, and
standard patient populations. Produced in four manufacturing plants
and supplied through more than 65 branches nationwide, Sizewise
offers a range of American-made specialty surfaces, bed frames, and
mobility devices that enhance patient healing and caregiver
satisfaction. Sizewise is headquartered in Lenexa, Kan. Learn more
at www.sizewise.com.
Agiliti, Inc. and Subsidiaries Adjusted EBITDA (unaudited)
The reconciliation of Sizewise's last twelve months net income to
adjusted EBITDA is as follows:
LTM (In
millions)
June
30,
2021
Net income
$
19
Interest expense
2
Depreciation and amortization
8
EBITDA
$
29
Management & other expenses
1
Adjusted EBITDA
$
30
EBITDA is defined as earnings before interest expense, income
taxes, depreciation and amortization. Adjusted EBITDA is defined as
EBITDA excluding non-cash shared-based compensation expense,
management fees and other non-recurring gains, expenses or losses,
transaction costs, remeasurement of the tax receivable agreement
and loss on extinguishment of debt. In addition to using EBITDA and
Adjusted EBITDA internally as measures of operational performance,
we disclose them externally to assist analysts, investors and
lenders in their comparisons of operational performance, valuation
and debt capacity across companies with differing capital, tax and
legal structures. We believe the investment community frequently
uses EBITDA and Adjusted EBITDA in the evaluation of similarly
situated companies. Adjusted EBITDA is also used by the Company as
a factor to determine the total amount of incentive compensation to
be awarded to executive officers and other employees. EBITDA and
Adjusted EBITDA, however, are not measures of financial performance
under accounting principles generally accepted in the United States
of America (“GAAP”) and should not be considered as alternatives
to, or more meaningful than, net income as measures of operating
performance or to cash flows from operating, investing or financing
activities or as measures of liquidity. Since EBITDA and Adjusted
EBITDA are not measures determined in accordance with GAAP and are
thus susceptible to varying interpretations and calculations,
EBITDA and Adjusted EBITDA, as presented, may not be comparable to
other similarly titled measures of other companies. EBITDA and
Adjusted EBITDA do not represent amounts of funds that are
available for management’s discretionary use. EBITDA and Adjusted
EBITDA presented may not be the same as EBITDA and Adjusted EBITDA
calculations as defined in the First Lien Credit Facilities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210914005695/en/
Kate Kaiser Agiliti, Corporate Communication and Investor
Relations kate.kaiser@agilitihealth.com
Agiliti (NYSE:AGTI)
Historical Stock Chart
From Apr 2024 to May 2024
Agiliti (NYSE:AGTI)
Historical Stock Chart
From May 2023 to May 2024