Preferred Homecare

Summary

Financial Advisor

Phoenix, AZ

Preferred Homecare (“PHC”) operates three primary services; 1) Rental of durable medical equipment (canes, beds, pumps, lifts, walkers, scooters, etc.); 2) Rental of respiratory therapy equipment (ventilators, oxygen concentrators, tanks, etc.); 3) Infusion therapy (intravenous medication).

Carl Marks Advisors was retained to advise the Sponsor and Board of Directors through the following challenges; 1) Maturing credit facility; 2) Limited liquidity; 3) Recently failed sale effort; 4) Declining financial performance; 5) Challenging regulatory environment.

Key Challenges

Customer Pricing Pressure

Competitive Market

High Capex Requirements

Engagement Highlights

Phase 1 – January 2017 – March 2017: CMA performed a comprehensive business assessment focused on stabilizing liquidity, improving financial performance, developing a strategic plan, and gaining both Board of Director and Lender support.
- Liquidity: PHC was challenged by past due AP, nervous suppliers, no available liquidity and the cancellation of revenue bonds requiring incremental collateral to be reinstated.
- Strategic Plan: CMA analyzed seven different potential paths forward for PHC, evaluating the options we believe both maximized the value to all stakeholders and afforded the best opportunity for lender support.
Phase II: July 2017 – January 2018: CMA was asked to lead the wind down of the California operations.
- CMA’s responsibilities included full operational authority to oversee and direct the wind down of 16 locations, 600+ employees servicing ≈25,000+ oxygen patients, ≈5,000+ ventilator patients and ≈35,000+ DME equipment rental patients.
Resolution: Over the tenure of CMA’s engagement, the Company significantly increased EBITDA, generated meaningful positive free cash low and sold home infusion and RT/DME business lines to separate buyers in two different transactions returning proceeds to the equity (previously believed to be out of the money).

Preferred Homecare

Summary

Financial Advisor

Key Challenges

Engagement Highlights

Sign Up for Our Newsletter