The Oncology Institute
is the U.S. Market Leader in Value-Based Oncology
Care
DFP Healthcare Acquisitions Corp (“DFP”) (NASDAQ: DFPH,
DFPHW), a special purpose acquisition company sponsored by an
affiliate of Deerfield Management Company, L.P. (“Deerfield”) and
Richard Barasch, a veteran healthcare public company executive and
investor, announced today that it has entered into a definitive
agreement for a business combination with The Oncology Institute (
“TOI” or “The Company”), the U.S. market leader in providing
value-based oncology care. Following the business combination, DFP
expects to be renamed The Oncology Institute and will remain listed
on the NASDAQ stock market under new ticker symbol “TOI”.
The Oncology Institute Investment Highlights
- Leading Value-Based Care Provider in Oncology – A Huge
Addressable Market: The Oncology Institute is leading the shift
to value-based oncology care by utilizing a highly scalable and
replicable operating model to disrupt the $200 billion U.S.
oncology market. Believing that every patient deserves access to
world-class care close to home, The Oncology Institute currently
manages over 50 community-based practice locations in California,
Nevada, Arizona, and Florida. TOI serves approximately 1.3 million
lives under value-based contracts and treats over 46,000 patients
each year through relationships with leading payors and at-risk
physician groups.
- Highly Differentiated, Technology Enabled Care Model:
TOI’s data-driven model provides patients with comprehensive care
and symptom management, which improves patient experience,
minimizes unnecessary hospitalizations, and supports adherence to
treatment regimens. Staffed by a clinical team that speaks more
than 20 languages, The Oncology Institute offers patient
navigators, in-house labs, transfusions, and dispensary services as
well as cutting-edge treatments including an outpatient stem cell
transplant program and access to more than 130 clinical
trials.
- Well Positioned for Long Term Growth: After generating a
30% revenue CAGR from 2016-2020, The Oncology Institute will pursue
a strategy of organic growth and selected acquisitions to
accelerate growth trajectory in collaboration with payor and at-
risk providers. TOI’s pipeline of organic growth initiatives in new
and existing markets exceeds 3.5 million patient lives, and the
company is also pursuing an actionable acquisition pipeline in new
and existing markets.
- Highly Experienced Management Team: The Oncology
Institute’s management team will be comprised of seasoned
healthcare industry professionals, led by Chief Executive Officer
Brad Hively, Chief Operating Officer Daniel Virnich, M.D., Chief
Medical Officer Yale Podnos, M.D., Chief Administrative Officer
Matt Miller, M.D., and Chief Financial Officer Scott Dalgleish.
Richard Barasch will become Executive Chairman of The Oncology
Institute upon closing of the business combination. Mr. Barasch was
formerly Chairman and CEO of Universal American Corp., a publicly
traded health insurance and services company from 1995 until
Universal American’s acquisition by WellCare Health Plans in May
2017. Mr. Barasch has led the successful business combinations of
AdaptHealth Corp. (Nasdaq: AHCO), which came public in 2019 via a
business combination with DFB Healthcare Acquisitions Corp. and
CareMax (Nasdaq: CMAX), which came public in 2021 via a business
combination with Deerfield Healthcare Technology Acquisitions
Corp.
Summary of the
Transaction
The transaction values the combined company at a pro forma
enterprise value of approximately $842 million and implies a
multiple of 2.4x estimated 2022 revenue. The current equity holders
of The Oncology Institute, which include Management, Havencrest
Capital Management, M33 Growth, and ROCA Partners, will be entitled
to receive an additional earn out payment of up to 12.5 million
shares of The Oncology Institute common stock.
In addition to the approximately $230 million held in the DFP
Trust Account, premier healthcare investors, including Fidelity
Management & Research Company LLC, Deerfield Management
Company, L.P. and Redmile Group, LLC have committed to purchase
$275 million of shares of common stock of the Company at $10.00 per
share through a private placement in public entity (a “PIPE”).
Assuming no redemptions of DFP public shares, the current equity
holders of The Oncology Institute will collectively own 48%,
Deerfield will own approximately 14%, other DFP stockholders
(including other PIPE investors) will own 33%, and DFP’s sponsor
will own 5% respectively of the approximately 106 million issued
and outstanding shares of common stock of The Oncology Institute
immediately following the closing.
DFP estimates that, assuming no redemptions of DFP shares, the
Company will have an initial market capitalization of approximately
$1.06 billion, with approximately $225 million of cash on the
balance sheet and a strong growth trajectory. The Oncology
Institute expects to use this capital to accelerate its de novo and
acquisition-driven growth initiatives.
Please refer to the investor presentation furnished with
DFP’s Current Report on Form 8-K for details on the pro-forma
financials of the Company and its Non-GAAP Financial
Measures.
Management Remarks
“TOI is elevating the standard of care in community oncology. By
focusing on individualized care plans, evidence-based medicine, and
great symptom control, TOI patients can achieve better outcomes
with reduced financial burden. The rising cost and poor
coordination of oncology care in the United States is driven by
several factors, including misalignment between physicians and
payors, complex and variable clinical pathways, and the high cost
of cancer therapies,” said Brad Hively, CEO of The Oncology
Institute. “Traditional fee for service payment models emphasize
quantity over quality of care, without considering patient wellness
and satisfaction as metrics of success. We are committed to
applying the principles of value-based care to simultaneously
enhance quality and manage costs. For more than 14 years, The
Oncology Institute has played a significant role in the lives of
cancer patients by providing accessible, high-quality medical care.
Our proposed combination with DFP brings us significantly closer to
expanding our presence across the United States and advancing our
efforts to rebuild the nation’s healthcare system.”
“The Oncology Institute is disrupting the status quo in cancer
care, and we are pleased to assist them in continuing their mission
of broadening access to high quality, value-based care.” said Mr.
Barasch. “Brad and his team have created a scalable, replicable
model with difficult-to-duplicate capabilities that facilitate
rapid expansion. We believe that their high-touch, data-driven
approach to cancer care represents the model of the future. This
business combination will create a well-capitalized company that is
poised to expand organically, through accretive M&A activity,
and via strategic payor relationships.”
The business combination, which has been approved by the board
of directors of DFP and The Oncology Institute, is expected to
close in the 3rd or 4th quarter of 2021, subject to customary
conditions, including the approval by DFP stockholders.
A more detailed description of the transaction terms and a copy
of the business combination agreement will be included in a current
report on Form 8-K to be filed by DFP with the United States
Securities & Exchange Commission (“SEC”). DFP will file a proxy
statement with the SEC in connection with the transaction.
Jefferies LLC is acting as lead financial advisor and Guggenheim
Securities, LLC is acting as financial advisor to The Oncology
Institute. Deutsche Bank Securities Inc. and UBS Investment Bank
are acting as financial advisors to DFP. Deutsche Bank Securities
Inc., Jefferies LLC and UBS Investment Bank are acting as capital
markets advisors to DFP. Latham & Watkins LLP is acting as
legal advisor to The Oncology Institute, White & Case LLP and
Polsinelli PC are acting as legal advisors to DFP, and Katten
Muchin Rosenman LLP is acting as legal advisor to Deerfield.
Deutsche Bank Securities Inc., Jefferies LLC, UBS Investment Bank
and Guggenheim Securities, LLC, are acting as placement agents on
the PIPE and Sidley Austin LLP is acting as legal counsel to the
placement agents.
Management Presentation
Information
The management of DFP and The Oncology Institute will make a
presentation via webcast regarding the business combination on June
28, 2021 at 9:30 am EST. In connection with this event, DFP will
furnish an investor presentation in a current report on Form 8-K to
be filed by DFP with the United States Securities & Exchange
Commission (“SEC”).
Please dial 877-407-9753 or 201-493-6739 or
https://78449.themediaframe.com/dataconf/productusers/drf/mediaframe/45605/indexl.html
A replay will be available using the above the link.
About The Oncology
Institute
Founded in 2007, The Oncology Institute of Hope and Innovation
is one of the largest community oncology practices in the U.S. as
well as our nation’s leading value-based oncology services
platform. The Oncology Institute provides care through more than 80
physicians and advanced practice providers in 50+ clinic locations,
with more than 500 total employees helping to offer leading-edge,
evidence-based cancer care to a population of more than 1 million
patients. The Oncology Institute brings comprehensive, integrated
cancer care into community settings, including clinical trials,
stem cell transplants, transfusions, and other care delivery models
traditionally associated with the most advanced tertiary care
settings. For more information visit
www.theoncologyinstitute.com.
About DFP Healthcare Acquisitions
Corp.
DFP Healthcare Acquisitions Corp. is a blank check company whose
business purpose is to effect a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses. The Company’s
sponsor is an affiliate of Deerfield Management Company, L.P., an
investment firm focused exclusively on the healthcare industry, and
Richard Barasch. The Company’s strategy will be to identify,
acquire and, after its initial business combination, build, a
healthcare or healthcare related business. The Company intends to
focus its investment effort broadly across the entire healthcare
industry, which encompasses services, therapeutics, devices,
diagnostics and animal health.
About Deerfield
Deerfield is an investment management firm committed to
advancing healthcare through investment, information and
philanthropy. For more information, please visit
www.deerfield.com
Important Information and Where to Find
It
In connection with the proposed business combination, DFP
intends to file a registration with the statement on Form S-4 (the
“Registration Statement”) with the SEC, which will include a proxy
statement/prospectus and certain other related documents, which
will be both the proxy statement to be distributed holders of
shares of DFP common stock in connection with DFP’s solicitation of
proxies for the vote by DFP’s stockholders with respect to the
business combination and other matters as may be described in the
definitive proxy statement, as well as the prospectus relating to
the offer and sale of securities of DFP to be issued in the
business combination. DFP’s stockholders and other interested
persons are advised to read, when available, the preliminary proxy
statement/prospectus and documents incorporated by reference
therein filed in connection with the business combination, as these
materials will contain important information about the parties to
the business combination agreement, DFP and the business companion.
After the Registration Statement is declared effective, the
definitive proxy statement will be mailed to DFP’s stockholders as
of the record date to be established for voting on the business
combination and other matters as may be described in the
Registration Statement. Stockholders will also be able to obtain
copies of the proxy statement/prospectus and other documents filed
with the SEC that will be incorporated by reference in the proxy
statement/prospectus, without charge, once available, at the SEC’s
web site at http://www.sec.gov, or by directing a request to: DFP
Healthcare Acquisitions Corp. at its principal executive offices
345 Park Avenue South, New York, NY 10010.
Participants in the
Solicitation
DFP and its directors and executive officers, may be deemed
participants in the solicitation of proxies from DFP’s stockholders
with respect to the proposed business combination. A list of the
names of those directors and executive officers and a description
of their interests in DFP is contained in the registration
statement on Form S-1, which was initially filed by DFP with the
SEC on February 21, 2020 and is available free of charge at the
SEC’s web site at www.sec.gov, or by directing a request to DFP
Healthcare Acquisitions Corp. at its principal executive offices
345 Park Avenue South New York, New York 10010. Additional
information regarding the interests of such participants will be
contained in the Registration Statement when available.
The Oncology Institute’s directors and executive officers may
also be deemed to be participants in the solicitation of proxies
from the stockholders of DFP in connection with the business
combination. A list of the names of such directors and executive
officers and information regarding their interests in the business
combination will be included in the Registration Statement when
available.
Non-Solicitation
This press release is for informational purposes only and shall
not constitute a solicitation of a proxy, consent or authorization
with respect to any securities or in respect of the proposed
business combination and shall not constitute an offer to sell or a
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any state or jurisdiction in which such
offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of such
state or jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section
10 the Securities Act of 1933, or an exemption therefrom.
Forward-Looking
Statements
This press release includes certain statements that are not
historical facts but are forward-looking statements for purposes of
the safe harbor provisions under the United States Private
Securities Litigation Reform Act of 1995. Forward-looking
statements generally are accompanied by words such as “believe,”
“may,” “will,” “estimate,” “continue,” “anticipate,” “intend,”
“expect,” “should,” “would,” “plan,” “predict,” “potential,”
“seem,” “seek,” “future,” “outlook,” and similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements
include, but are not limited to, statements regarding projections,
estimates and forecasts of revenue and other financial and
performance metrics and projections of market opportunity and
expectations, the expectation that the Company’s common stock will
be listed on Nasdaq, and the anticipated closing date of the
proposed business combination. These statements are based on
various assumptions and on the current expectations of DFP and The
Oncology Institute and are not predictions of actual performance.
These forward-looking statements are provided for illustrative
purposes only and are not intended to serve as, and must not be
relied on by any investor as, a guarantee, an assurance, a
prediction or a definitive statement of fact or probability. Actual
events and circumstances are difficult or impossible to predict and
will differ from assumptions. Many actual events and circumstances
are beyond the control of DFP and The Oncology Institute. These
forward-looking statements are subject to a number of risks and
uncertainties, including the outcome of judicial and administrative
proceedings to which The Oncology Institute may become a party or
governmental investigations to which The Oncology Institute may
become subject that could interrupt or limit The Oncology
Institute’s operations, result in adverse judgments, settlements or
fines and create negative publicity; changes in The Oncology
Institute’s clients’ preferences, prospects and the competitive
conditions prevailing in the healthcare sector; the inability of
the parties to successfully or timely consummate the proposed
business combination, including the risk that any required
regulatory approvals are not obtained, are delayed or are subject
to unanticipated conditions that could adversely affect the
combined company or the expected benefits of the proposed business
combination or that the approval of the stockholders of DFP and/or
the equity holders of The Oncology Institute for the proposed
business combination is not obtained; failure to meet stock
exchange listing standards following the consummation of the
business combination; costs related to the business combination;
failure to realize the anticipated benefits of the proposed
business combination, including as a result of a delay in
consummating the proposed business combination or a delay or
difficulty in integrating the businesses of DFP and The Oncology
Institute; the amount of redemption requests made by DFP’s
stockholders; the impact of COVID-19 on the combined company’s
business and/or the ability of the parties to complete the proposed
Business Combination; those factors discussed in DFP’s registration
statement on Form S-1, which was initially filed with the SEC on
February 21, 2020, under the heading “Risk Factors,” and other
documents of DFP filed, or to be filed, with the SEC. If the risks
materialize or assumptions prove incorrect, actual results could
differ materially from the results implied by these forward-looking
statements. There may be additional risks that neither DFP nor The
Oncology Institute presently know or that DFP and The Oncology
Institute currently believe are immaterial that could also cause
actual results to differ from those contained in the
forward-looking statements. In addition, forward-looking statements
reflect DFP’s and The Oncology Institute’s expectations, plans or
forecasts of future events and views as of the date of this press
release. DFP and The Oncology Institute anticipate that subsequent
events and developments will cause DFP’s and The Oncology
Institute’s assessments to change. DFP and The Oncology Institute
do not undertake any obligation to update any of these
forward-looking statements. These forward-looking statements should
not be relied upon as representing DFP’s and The Oncology
Institute’s assessments as of any date subsequent to the date of
this press release. Accordingly, undue reliance should not be
placed upon the forward-looking statements.
Non-GAAP Financial
Measures
The financial information and data contained in this press
release is unaudited and does not conform to Regulation S-X.
Accordingly, such information and data may not be included in, may
be adjusted in or may be presented differently in, any proxy
statement or registration statement to be filed by DFP or The
Oncology Institute with the SEC. Some of the financial information
and data contained in this press release, such as adjusted EBITDA,
has not been prepared in accordance with United States generally
accepted accounting principles (“GAAP”). A reconciliation of
certain of these non-GAAP financial measures to their most
comparable GAAP measure is set forth in a table in the investor
presentation.
DFP and The Oncology Institute believe these non-GAAP measures
of financial results provide useful information to management and
investors regarding certain financial and business trends relating
to The Oncology Institute’s financial condition and results of
operations. DFP and The Oncology Institute believe that the use of
these non-GAAP financial measures provides an additional tool for
investors to use in evaluating ongoing operating results and trends
in and in comparing The Oncology Institute’s financial measures
with other similar companies, many of which present similar
non-GAAP financial measures to investors. Management of The
Oncology Institute does not consider these non-GAAP measures in
isolation or as an alternative to financial measures determined in
accordance with GAAP. The principal limitation of these non-GAAP
financial measures is that they exclude significant expenses and
income that are required by GAAP to be recorded in The Oncology
Institute’s financial statements. In addition, they are subject to
inherent limitations as they reflect the exercise of judgments by
management about which expense and income are excluded or included
in determining these non-GAAP financial measures. In order to
compensate for these limitations, management presents non-GAAP
financial measures in connection with GAAP results. You should
review The Oncology Institute audited financial statements, which
will be presented in DFP’s proxy statement to be filed with the
SEC, and not rely on any single financial measure to evaluate DFP
and The Oncology Institute’s business.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210628005481/en/
DFP Healthcare Chris Wolfe chris.wolfe@dfphealthcare.com
(212) 551-1600
DFP Healthcare Investor Relations The Equity Group Inc.
Devin Sullivan Senior Vice President dsullivan@equityny.com (212)
836-9608
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