Quipt: ‘We’ll be diligently working on deals’ 

CINCINNATI – Quipt Home Medical is “diligently working the pipeline” of acquisitions, specifically tuck-in acquisitions, says CEO and Chairman Greg Crawford. 

The reason for that renewed interest: The “valuation gap” between the recent acquisition of Rotech Healthcare by Owens & Minor at 6.3x EBITDA and Quipt’s fundamentals, he told investors on a recent call to discuss the company’s third quarter earnings. 

“We think that we can still acquire companies in the 4% to 5% range prior to any synergies, which is where we've historically acquired companies – we’ll say in the $20 million and under space,” he said. “That's where we see a lot of opportunity for us in the future, and that will be those tuck-ins.” 

As to whether any acquisitions are in the works before year-end: “We've been able to reinvigorate in that after pivoting around what we faced in the first part of the year in that,” he said. “So, we'll diligently be working on deals and closing them as quickly as possible.” 

Among Quipt’s challenges earlier this year were the expiration of the 75-25 Medicare blended rates on Jan. 1, the Change Healthcare cyberattack and the loss of certain Humana Medicare Advantage HMO members due to the insurer’s capitated contracts with AdaptHealth and Rotech Healthcare.  

“The sales team has really had to kind of pivot in that and try to pick up other referrals in that to continue to drive the revenue forward,” said Crawford. “And then, we've also been expanding into continuum areas with additional sales coverage throughout our territories.” 

Quipt is also continuously exploring ways to expand its product portfolio, including a previously announced move into the diabetes market with continuous glucose monitors and supplies. 

“This initiative has shown promising early results and represents a significant opportunity to add value to our existing patient base without increasing SG&A expenses,” said Crawford. “By addressing an unmet need, we can leverage our established relationships and deep understanding of patient needs to cross-sell new products effectively.” 

Diabetes patients complement Quipt’s existing patients, which grew 9% year-over-year and included 120,118 respiratory resupply setups for the three months ended June 30, 2024. 

“Clinical research indicates that up to 48% of individuals diagnosed with Type 2 diabetes also have sleep apnea, highlighting the synergistic potential of our expanded portfolio,” said Crawford.