-- Adds a critical supportive care platform
with unique data analytics to benefit payors and patients --
-- Attractive financial profile with mid-teens
recurring revenue growth and strong margins --
ModivCare Inc. (“ModivCare” or the “Company”) (Nasdaq: MODV), a
technology-enabled healthcare services company that provides a
suite of integrated supportive care solutions focused on improving
patient outcomes, today announced that the Company has signed a
purchase agreement to acquire VRI Intermediate Holdings, LLC
(“VRI”), an industry-leading provider of remote patient monitoring
(“RPM”) solutions.
Under the terms of the agreement, ModivCare will acquire 100
percent of the equity interests in VRI for a purchase price of $315
million, subject to customary purchase price adjustments. VRI
generated $56 million of revenue and $21 million of adjusted EBITDA
for the twelve-month period ended June 30, 2021. ModivCare intends
to finance the acquisition with fully committed debt financing from
Deutsche Bank Securities Inc. and Jefferies LLC. The transaction is
subject to regulatory approvals and other customary closing
conditions and is expected to close in the third quarter of 2021.
The Company expects the impact of the acquisition to be immediately
accretive to adjusted earnings.
“The acquisition of VRI brings us a national remote patient
monitoring and medication management platform, accelerating our
strategy to build a holistic suite of supportive care solutions
designed to address the social determinants of health, deliver
better care in the home, enhance patient lives and reduce
healthcare costs,” said Daniel E. Greenleaf, President and Chief
Executive Officer of ModivCare. “Moreover, by leveraging VRI’s data
analytics and technology, we expect to bring a more connected care
experience into the homes of underserved patient populations and
provide valuable insight to our payor partners, particularly when
combined with data from our other supportive care services of
non-emergency medical transportation, personal care, and
nutritional meal delivery.”
In summary, the transaction is expected to have the following
strategic benefits:
- Advances ModivCare’s vision to be the preeminent provider of
comprehensive supportive care services that address the social
determinants of health, including non-emergency medical
transportation, personal care, remote monitoring, medication
management, and nutrition
- Offers a highly compelling value proposition to health plans
through improved patient outcomes, enhanced patient engagement and
experience, peace-of-mind support for patients and the caregivers
who support them, and reduced costs
- Creates significant cross-selling opportunities given
ModivCare’s channel expertise in Medicaid, Medicare Advantage, and
state relationships
- Introduces new technology-enabled in-home solutions that deepen
ModivCare’s engagement with payors and patients
- Adds a strategic pillar and operating team to advance
ModivCare’s broader technology and data strategy
- Increases ModivCare’s total addressable market by an estimated
$8.5 billion in a market that is only 13% penetrated, with
considerable growth opportunities from increasing coverage of
remote monitoring by Medicaid and Medicare Advantage health
plans
- Provides a predictable recurring revenue stream that is
expected to grow in the mid-teens over the next several years, with
strong EBITDA margins in the mid- to high-30% range
Jason Anderson, Chief Executive Officer of VRI commented, “We
are excited to be joining forces with ModivCare, a pioneer in
supportive care solutions that address the social determinants of
health. Our technology and service offering will be highly
complementary to ModivCare, and we believe it will have a
significant positive impact on the patients ModivCare serves. We
believe there is enormous potential through the combination of our
organizations to advance supportive care and help drive value-based
care solutions to payors through our unique patient engagement and
data insights offering.”
VRI manages a comprehensive suite of services, including
personal emergency response systems (“PERS”), vitals monitoring,
medication management, and data-driven patient engagement
solutions. VRI provides its payor customers and patients with a
differentiated and outcomes-oriented service model that includes
high-touch clinical engagement with over 2.5 million annual
person-to-person patient interactions. VRI actively monitors over
155,000 patients from its two 24/7 care centers, leveraging
proprietary technology and data analytics. VRI also utilizes a
device agnostic approach with more than 250 integrated devices. VRI
serves a diverse base of customers across all 50 states, including
over 360 managed care plans and state Medicaid agencies and over
125 health systems and distributors.
VRI will maintain its Franklin headquarters, as well as its care
centers in Franklin, Ohio, and Sullivan, Illinois. Jason Anderson,
who has been a leader at VRI since 2015, will remain as its
CEO.
Transaction Advisors
Deutsche Bank Securities Inc. is serving as exclusive financial
advisor to ModivCare and Gibson, Dunn & Crutcher LLP is serving
as ModivCare’s legal advisor. TripleTree, LLC is serving as
exclusive financial advisor to VRI and Alston & Bird LLP is
serving as VRI’s legal advisor.
Conference Call
ModivCare will hold a conference call to discuss the acquisition
of VRI on Tuesday, August 3, 2021, at 8:30 a.m. ET.
To access the conference call by phone, please dial:
- US toll-free: (877) 423-9820
- International: (201) 493-6749
The webcast and accompanying presentation can be accessed on the
Company’s website:
https://investors.modivcare.com/events-presentations/default.aspx.
The webcast also can be accessed here.
The conference call will be archived on the Company’s
website.
Forward-Looking Statements
Certain statements contained in this press release constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are
predictive in nature and are frequently identified by the use of
terms such as “may,” “will,” “should,” “expect,” “anticipate,”
“believe,” “estimate,” “intend,” and similar words indicating
possible future expectations, events or actions. In addition,
statements that are not historical statements of fact should also
be considered forward-looking statements. Such forward-looking
statements are based on current expectations, assumptions,
estimates and projections about the Company’s business and the
Company’s industry, and are not guarantees of the Company’s future
performance. These statements are subject to a number of known and
unknown risks, uncertainties and other factors, many of which are
beyond the Company’s ability to control or predict, which may cause
actual events to be materially different from those expressed or
implied herein.
The Company has provided additional information in its Annual
Report on Form 10-K filed with the Securities and Exchange
Commission (the “SEC”) for the fiscal year ended December 31, 2020
and subsequent filings with the SEC. You are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date the statement was made and are expressly
qualified in their entirety by the cautionary statements set forth
herein and in our other filings with the SEC. We undertake no
obligation to update or revise any forward- looking statements
contained in this release, whether as a result of new information,
future events or otherwise, except as required by applicable
law.
About ModivCare
ModivCare Inc. (“ModivCare”) (Nasdaq: MODV) is a
technology-enabled healthcare services company that provides a
suite of integrated supportive care solutions for public and
private payors and their patients. Our value-based solutions
address the social determinants of health (SDoH), enable greater
access to care, reduce costs, and improve outcomes. We are a
leading provider of non-emergency medical transportation (NEMT),
personal and home care, and nutritional meal delivery. ModivCare
also holds a minority equity interest in CCHN Group Holdings, Inc.
and its subsidiaries (“Matrix Medical Network”), which partners
with leading health plans and providers nationally, delivering a
broad array of assessment and care management services to
individuals that improve health outcomes and health plan financial
performance. To learn more about ModivCare, please visit
www.modivcare.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210803005434/en/
Media: Kate Zerone Senior Manager, Communications
kate.zerone@modivcare.com
Investors: The Equity Group Kalle Ahl, CFA
kahl@equityny.com
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