Solara is an independent distributor of continuous glucose monitors (CGM), insulin pumps and other diabetic supplies

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Solara is an independent distributor of continuous glucose monitors. (Credit: Pixabay/Gerd Altmann)

US-based medical equipment, supplies and services provider AdaptHealth has signed two separate agreements to acquire Solara Medical Supplies from Linden Capital Partners and ActivStyle from Riverside Company.

Solara is an independent distributor of continuous glucose monitors (CGM), insulin pumps and other diabetic supplies and offers a complete suite of diabetes management supplies to patients.

The acquisition of Solara enables AdaptHealth to expand its presence into the diabetes segment.

ActivStyle is a direct-to-consumer supply company that offers incontinence and urology products to patients in Illinois, Minnesota, Iowa, Ohio, Pennsylvania, Florida and Texas.

Under the terms of the transaction, Solara CEO Steve Foreman, ActivStyle CEO Gayle Devin, and their respective management teams will be transferred to AdaptHealth.

Foreman said: “We are extremely proud of the organization we have built at Solara, which is based upon an unwavering commitment to serve our patients. We are excited about the capabilities that AdaptHealth will bring to Solara and the ways in which they will enhance our patient service.”

Devin said: “We are excited to join the AdaptHealth team. Our cultures are aligned, and we have a very compelling value proposition to offer patients, payors and referrals. These synergies coupled with the resources of AdaptHealth and the combined strengths of our teams will be a winning formula to expand and grow the medical supply business.”

AdaptHealth will fund the consideration through incremental debt and newly-issued equity

AdaptHealth is planning to fund the transactions and associated costs through a combination of incremental debt and newly-issued equity. The company will receive $240m financing from its core lender group, as an incremental add-on to its existing term loan facility.

In addition, the company has also received commitments for $190m equity investments from One Equity Partners and $35m from funds managed by Deerfield Management, and is issuing $62.5m in common stock to the sellers of Solara.

AdaptHealth said that the transaction and financing are expected to close in the third quarter of 2020, subject to certain customary closing conditions and regulatory approvals.

AdaptHealth CEO Luke McGee said: “As AdaptHealth seeks to provide more value to patients, healthcare professionals, and insurance payors managing chronic conditions in the home, we believe offering a more comprehensive solution for diabetes, including CGMs, is an important addition to our expanding suite of products.

“The acquisition of Solara allows AdaptHealth to add scale in CGM and other diabetes management supplies and offer enhanced care for our patients with co-morbidities like obstructive sleep apnea. We believe that Solara and ActivStyle will further AdaptHealth’s vision of becoming a leading provider of connected health solutions and care in the home.”