AdaptHealth to Acquire McKesson’s Patient Care Solutions Business for $30 Million

VCBeat (WeChat ID: vcbeat) learned via Business Wire that on November 22, 2019, AdaptHealth, the third-largest home medical equipment (HME) provider in the United States, announced it had reached an agreement with McKesson Corporation to acquire its Patient Care Solutions (PCS) business for $30 million.

Subject to the satisfaction of customary closing conditions, the proposed transaction is expected to be completed in December 2019. By the second half of 2020, McKesson’s patient care solutions business will be fully integrated into AdaptHealth’s platform.

McKesson’s Patient Care Solutions (PCS) business currently serves all 50 U.S. states, directly providing patients across the country with wound care supplies, ostomy supplies, urological supplies, incontinence products, diabetes care supplies, and breast pumps. The company maintains extensive relationships with physicians, healthcare institutions, and customers.

For the twelve months ended October 31, 2019, PCS generated net revenues of approximately $134 million. In connection with the completion of this acquisition, AdaptHealth will enter into a supply and distribution agreement with McKesson regarding the PCS home medical equipment (HME) service line.

AdaptHealth, founded in 2012 and headquartered in Pennsylvania, USA, is the third-largest home medical equipment (HME) provider in the United States. The company primarily rents and sells medical products such as sleep apnea devices, oxygen equipment, wheelchairs, walkers, and hospital beds, delivering home healthcare services to over one million patients annually. Driven by population aging, rising prevalence of chronic diseases, and the ongoing shift of healthcare delivery from institutional settings to the home, the market size for these medical products has exceeded $1.2 billion.

Compared with other HME companies, AdaptHealth has obvious industry competitive advantages by virtue of its leading technology platform. The company's technology platform is designed for the ever-evolving HME sector, featuring automated and integrated workflows that significantly enhance medical efficiency. AdaptHealth is committed to providing prompt and efficient services to healthcare providers and patients through advanced equipment and its technology platform, thereby improving patient compliance and promoting the development of the HME industry.

AdaptHealth CEO Luke McGee stated, “The completion of the PCS acquisition represents a significant step forward in our continued growth as an industry consolidator. In addition to expanding our business scale and geographic reach, we will add urology and ostomy products to our already comprehensive HME portfolio and substantially increase our investment in areas such as wound care, incontinence supplies, and diabetes care. We believe that adding these products will double our overall target market.”

Josh Parnes, President and Chief Operating Officer of AdaptHealth, added, “As part of the transaction, we are also very pleased to strengthen our existing distribution relationship with McKesson. The acquisition of PCS complements our existing PAP (sleep) resupply offerings, enabling us to provide a broader product portfolio to both PCS and AdaptHealth’s current customers.”

McKesson Corporation, founded in 1833 and headquartered in Texas, USA, is a medical distribution and healthcare information technology company. The company provides prescription and over-the-counter drugs, medical supplies, healthcare IT, and pharmacy management software.

(Compiled by Wang Fang)