MIAMI, July 6, 2021 /PRNewswire/-- Cano Health,
Inc. ("Cano Health") (NYSE: CANO), a leading value-based
primary care provider for seniors and underserved communities,
today announced it has acquired Doctor's Medical Center ("DMC") for
$300 million on July 2, 2021. DMC is a primary care provider
offering an innovative and integrated approach to Medicare,
Medicaid, and ACA (Exchange) members across 18 medical centers in
South Florida. The acquisition
expands Cano Health's membership, and further enhances the
company's leading position in the fragmented Florida market. With 15 of the 18 medical
centers serving predominantly adult and pediatric Medicaid members,
the addition of DMC also enables Cano Health to deliver more
targeted services to its existing Medicaid and ACA members.
"Cano Health is on a mission to become America's Primary Care,
and today's acquisition brings us one step closer to that important
goal," said Dr. Marlow Hernandez,
Co-Founder, Chairman, and CEO of Cano Health. "The DMC team has
served the South Florida region
for nearly 25 years, evolving its clinical platform to meet the
diverse care needs of the community. With DMC as part of the Cano
Health family, we are bringing our care model to more patients and
acquiring important footprint and infrastructure to further improve
the clinical outcomes of underserved patients."
"Doctor's Medical Center joins the Cano Health family energized
by what we can accomplish together for our patients," added Dr.
Ventura de Paz, Founder, President,
and CEO of DMC. "Since I founded DMC, we have operated with the
belief that everyone should have access to quality health care.
This union brings even more services and resources to our patients
and our dedicated team members, so we can thrive for generations to
come."
The acquisition brings the Cano Health care model – built on
access, quality, and wellness – to DMC's Medicare, Medicaid and ACA
members, further positioning Cano Health as the provider of choice
in the communities it serves. The acquisition also expands Cano
Health's long-standing partnership with Humana.
"Cano Health's focus on preventive care and wellness aligns with
Humana Healthy Horizons and our 'human care' approach to serving
our Medicaid members," said Humana Florida Medicaid President
Jocelyn Chisholm Carter. "Teaming
with Cano Health, we continue to focus on making sure our members
receive the full-service health care services they need in a
welcoming environment."
Strategic Rationale
Like Cano Health, DMC is
dedicated to providing quality primary care to its members, with an
emphasis on innovation. Both companies operate as critical members
of the community, building bonds with their members to improve care
and outcomes. Estimated standalone full year 2021 DMC revenue is
$194 million with approximately
$106 million expected in the second
half of 2021 due to membership growth and improvements in health
plan contracts. Estimated full year 2021 adjusted EBITDA is
$22 million which is expected to grow
30%-40% year-over-year in 2022 due to top line growth and Cano
Health platform synergies driving margin expansion.
The combination with DMC increases Cano Health's membership to
approximately 197,000 members and 106 medical centers, with over
1,000 staff and affiliate providers across the country.
Cano Health anticipates that combining with DMC will:
- Grow Cano Health's membership base with the addition of
approximately 7,000 Medicare Advantage members, 31,000 Medicaid
members, and 14,000 ACA members.
- Increase capacity for Medicare Advantage members at Cano Health
medical centers and enable focused delivery of services tailored to
senior patients.
- Provide targeted services based on DMC's model of specialized
Medicaid medical centers with services appropriate to its pediatric
and adult members.
- Improve management of Cano Health's existing Medicaid member
population by leveraging specialized services at DMC centers.
- Build upon Cano Health's strong relationship with Humana by
expanding and enhancing services for Humana's Medicaid members in
Florida, making Cano Health the
largest independent value-based primary care provider to both
Medicare and Medicaid patients in the State.
- Deliver on Cano Health's strategic objective to build, buy, and
manage medical practices. Cano Health continues to pursue three key
initiatives to realize the massive opportunity in value-based
primary care: 1) organic growth, 2) new market entry and 3)
targeted acquisitions.
Financial Terms
- Cano Health acquired DMC with $300
million in cash. Concurrent with the acquisition, Cano
Health borrowed $250 million through
an unsecured debt facility on July 2,
2021.
Guidance Update
With the close of the DMC acquisition, Cano Health is updating
its previous guidance given on June 14,
2021. In contrast to prior 2021 guidance, which included
projections for potential acquisitions, this guidance excludes the
impact of any future acquisitions.
- Full year 2021 revenue of approximately $1.5 billion (from $1.4-$1.5 billion
previously), an increase of approximately 80% year-over-year
- Full year 2021 adjusted EBITDA of approximately $110 million (from $100
million to $110 million
previously)
- 2021 ending membership of 205,000-210,000 (from 154,000-162,000
previously)
- 2021 ending medical centers of 121-126 (from 95-105
previously)
- Acquisition pipeline remains robust; future acquisitions would
be accretive to the above guidance
- Guidance continues to exclude the potential upside impact of
CMS' Direct Contracting Entity (DCE) program
Cano Health is also providing the following guidance for 2022,
an update from projections shared at its Investor and Analyst day
held on March 4, 2021. In contrast to
prior 2022 guidance, which included projections for potential
acquisitions, this guidance excludes the impact of any future
acquisitions.
- Full year 2022 revenue of approximately $2.23 billion (unchanged), an increase of
approximately 49% year-over-year
- Full year 2022 adjusted EBITDA of $150
million (from $135 million
previously)
- 2022 ending membership of 250,000 (from 230,000
previously)
- Ending medical centers of 180, reflecting the opening of 54-59
de novos in 2022
- Acquisition pipeline remains robust; future acquisitions would
be accretive to the above guidance
- Guidance continues to exclude the potential upside impact of
CMS' Direct Contracting Entity (DCE) program
An updated Investor Presentation with additional detail is
available on the company's investor relations website
(www.canohealth.com/investors/).
About Cano Health
Cano Health operates value-based primary care centers and
supports affiliated medical practices that specialize in primary
care for seniors in Florida, Texas, Nevada,
and Puerto Rico, with additional markets in development. As
part of its care coordination strategy, Cano Health
provides sophisticated, high-touch population health management
programs including telehealth, prescription home delivery, wellness
programs, transition of care, and high-risk and complex care
management.
Cano Health's personalized patient care and proactive approach
to wellness and preventive care sets it apart from
competitors. Cano Health has consistently improved
clinical outcomes while reducing costs, affording patients the
opportunity to lead longer and healthier lives. Cano Health
serves a predominantly minority population (80% of its patients are
Latino or African American) and low-income population (50% of its
members are dual eligible for Medicare and Medicaid). For more
information
visit www.canohealth.com or www.canohealth.com/investors/.
About Doctor's Medical Center
Doctor's Medical Center (DMC) provides integrated, innovative
care to Medicare, Medicaid and ACA (Exchange) members in South
Florida. Founded in 1996, it has grown to 18 medical centers
located in Miami-Dade and
Broward counties. DMC
Medicare and Medicaid members have access to dedicated medical
centers and staff that provide care targeted to their unique
needs.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995,
as amended. Forward-looking statements relate to future
events and anticipated results of operations, business strategies,
the anticipated benefits of the proposed transaction, the
anticipated impact of the proposed transaction on Cano Health's
business and future financial and operating results, the expected
amount and timing of synergies from the proposed transaction, the
financial guidance for the 2021 and 2022 fiscal year and other
aspects of our operations or operating results. These
forward-looking statements generally can be identified by phrases
such as "will," "expects," "anticipates," "foresees," "forecasts,"
"estimates" or other words or phrases of similar import. It is
uncertain whether any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do, what impact they will have on the results of operations
and financial condition.
Important risks and uncertainties that could cause our actual
results and financial condition to differ materially from those
indicated in forward-looking statements include, among others,
changes in market or industry conditions, regulatory environment,
competitive conditions, and receptivity to our services; our
ability to continue our growth; our ability to integrate our
acquisitions and achieve desired efficiencies; changes in laws and
regulations applicable to our business; our ability to maintain our
relationships with health plans and other key payers; the impact of
COVID-19 or another pandemic, epidemic or outbreak of infectious
disease on our business and results of operation; and our ability
to recruit and retain qualified team members and independent
physicians. For a detailed discussion of the risk factors that
could affect our actual results, please refer to the risk factors
identified in the definitive Proxy Statement/Prospectus filed with
the SEC on May 7, 2021 and
incorporated by reference into our Super 8-K filed on June 9, 2021. All information provided in this
press release is as of the date hereof, and we undertake no duty to
update or revise this information unless required by law.
Contacts
Cano Health
Investor Relations
Bob
East
Westwicke ICR
CanoHealthIR@westwicke.com
Media Relations
Patricia Graue
Brunswick Group
(212) 333-3810
canohealth@brunswickgroup.com
Media Relations – Local (FL)
Barbara Ferreiro
Cano Health
(305) 790-6731
barbara.ferreiro@canohealth.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/cano-health-acquires-doctors-medical-center-for-300-million-and-updates-guidance-for-2021-and-2022-301325725.html
SOURCE Cano Health, LLC