Home Healthcare and Medical Equipment Provider

Company Overview

Home Healthcare and Medical Equipment Provider - a full-service, support and education provider for all home medical equipment, respiratory, enteral therapy, sleep treatment and pediatric services.  They operate in the Chicagoland area, Northern & Central Illinois, Southern Wisconsin and Northwest Indiana.

Engagement Overview
•  A $20 million home medical equipment provider was acquiring the assets of a smaller rival and its senior lender required a third-party assessment of the transaction before committing additional funding.

 

•  Fort Dearborn Partners (FDP) was retained to assess the merits of the proposed transaction and perform limited due diligence over the target.

 

•  Our work consisted of:
–  Management interviews of the target company. 
–  Analyzed the financial impact of the transaction regarding profitability, capital structure and ability to service debt post-transaction.

–  Assessed and quantified expected synergies.

–  Analyzed sources and uses of cash and expected line of credit availability on Day One. 
–  Conducted scenario analysis on cost synergies and gross profit margins and its impact on debt service.

–  Valued the target company based on expected deal synergies.

 

•  During our review, we also identified deal risks including the ability to retain key personnel post-transaction, collectability of aged accounts receivable and the value of excess or obsolete inventory. 

 

 

 

 

Results
•  Based on Fort Dearborn’s analysis and recommendation, our client was able to purchase its rival within the timeframe established by all parties

•  The Senior lender, with Fort Dearborn's endorsement, committed the necessary funds to finance the transaction.