Preferred Homecare

Preferred Homecare logo


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).

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