Great Elm Group Sells Durable Medical Equipment Business for $80 Million
January 03 2023 - 3:30PM
Great Elm Group, Inc. (“we,” “us,” “our,” the “Company,” “GEG,” or
“Great Elm”), (NASDAQ: GEG) today announced the closing of the sale
of its majority interest in the Company’s Durable Medical Equipment
(DME) business, Great Elm Healthcare, LLC, to QHM Holdings, Inc., a
wholly-owned subsidiary of Quipt Home Medical Corp. (“Quipt”),
(NASDAQ: QIPT; TSXV: QIPT), a U.S. based leader in the home medical
equipment industry, focused on end-to-end respiratory care.
Transaction Terms and
Highlights
- Total consideration of $80 million includes approximately $73
million of cash, $5 million of assumed indebtedness and 431,996
shares of Quipt common stock valued at $2 million using a 20-day
volume-weighted average price.
- Quipt purchased 100% of the equity interests in the DME
business parent company, Great Elm Healthcare, LLC.
- Great Elm received approximately $26 million in net cash
proceeds and 346,028 shares of Quipt common stock after payment of
all obligations in connection with the transaction.
- Simplifies GEG’s reporting and organizational structure.
- Provides capital to grow the Investment Management
business.
Commentary“The successful sale of
our DME business and the recently announced Forest transaction are
transformative for Great Elm. When combined, the two transactions
are expected to increase holding company cash by over $70 million.
This allows Great Elm to dedicate more resources to scaling its
Investment Management business, utilizing the expertise and
relationships of our board and management team,” said Jason Reese,
Executive Chairman of GEG. “We continue to evaluate various
strategies which could include investments in our existing funds or
the acquisition of the management rights of new, long-duration
capital vehicles. Additionally, the sale simplifies our reporting
and organizational structure.”Peter Reed, Chief Executive Officer
of GEG, stated further, “We want to thank John Ehlinger, CEO of
DME, the executive team and all of the employees of DME for their
contributions to the success of the business since 2018. We believe
the company’s employees and future operations are in good hands
with Quipt.”
Gregory Crawford, Chief Executive Officer and
Chairman of Quipt, said, “With this acquisition, we have
taken a significant step toward our goal of becoming a leading
national provider of home medical equipment with a focus on
end-to-end respiratory care in the United States. Combining two
respiratory care providers with demonstrated track
records of enterprise growth, technology innovation, and
patient service allows us to build and improve
on our patient-centric ecosystem. With
a coast-to-coast presence in 26 U.S. states, the merged
business will have wide geographic reach permitting us
to efficiently expand upon and enhance relationships with
patients, key market partners, and payors. The
acquisition also provides further opportunities to increase
enterprise scale in this highly fragmented
marketplace. In addition to all of that, we are
especially excited to welcome the DME team to Quipt. We could
not be more excited for the future.”Imperial Capital, LLC served as
exclusive financial advisor to Great Elm Group, Inc.
About Great Elm Group, Inc. Great
Elm Group, Inc. (NASDAQ: GEG) is a publicly-traded, investment
management company focused on growing a scalable and diversified
portfolio of long-duration, permanent capital vehicles across
corporate credit, specialty finance, real estate and other asset
classes. Great Elm Group, Inc. and its subsidiaries currently
manage Great Elm Capital Corp., a publicly-traded business
development company, and Monomoy Properties REIT, LLC, an
industrial-focused real estate investment trust, in addition to
other investments. Great Elm Group, Inc.’s website can be found at
www.greatelmgroup.com.
About Quipt Home Medical
Corp.Quipt provides in-home monitoring and disease
management services focused on end-to-end respiratory solutions for
patients in the United States healthcare market. It seeks to
continue to expand its offerings to include the management of
several chronic disease states focusing on patients with heart or
pulmonary disease, sleep disorders, reduced mobility, and other
chronic health conditions. The primary business objective of Quipt
is to create shareholder value by offering a broader range of
services to patients in need of in-home monitoring and chronic
disease management. Quipt’s organic growth strategy is to increase
annual revenue per patient by offering multiple services to the
same patient, consolidating the patient’s services, and making life
easier for the patient.
Media & Investor Contact:
Investor Relationsgeginvestorrelations@greatelmcap.com
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