Accendra Health (ACH) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition accelerates growth in the Patient Direct segment and expands presence in the home-based care market, supporting the 2028 vision.

• Rotech strengthens and broadens the product and service suite, especially in respiratory, sleep apnea, diabetes, and wound care, enhancing access to the Durable Medical Equipment market.

• Enhances service to patients, providers, and payors through an integrated national network and diversified product, payer, and geographic mix.

• Rotech’s national footprint includes 325 locations in 46 states, supporting a robust infrastructure.

• Supports the goal of reaching $5 billion in Patient Direct revenue by 2028 and 8%+ revenue CAGR.

Financial terms and conditions

• Purchase price is $1.36 billion in cash, or $1.32 billion net of $40 million in anticipated tax benefits.

• Purchase multiple is 6.3x LTM EBITDA, or 5.1x including $50 million run-rate synergies.

• Fully committed financing is in place, using a mix of cash on hand and incremental borrowings.

• Book leverage ratio expected to rise to 4.2x EBITDA post-close, with a plan to deleverage below 3x within 24 months.

Synergies and expected cost savings

• Identified cost synergies of approximately $50 million by the end of year three, with further upside potential.

• Synergies to be realized through procurement, network and DS&A efficiencies, improved cash collection, and enhanced technology.

• Integration will focus on best practices from both organizations to drive service and profitability improvements.