Apria Inc., one of the country’s largest home healthcare companies, is poised to go public again, 13 years after it was taken private by a unit of Blackstone Group LP.
The company, whose in-home care products and services provide treatment for a variety of respiratory and sleep issues, won’t do so as an Orange County-based company.
Long based in Lake Forest, Apria changed its headquarters designation to Indianapolis near the end of 2020, regulatory filings pertaining to its planned initial public offering indicate.
It leases 83,000 square feet of office space in Indianapolis.
The company’s base of operations in Lake Forest ran 100,000 square feet as of late last year. The two buildings it occupies in the city, near the Nakase Nursery development site along Bake Avenue, are leased for another year, regulatory filings show.
Portions of one building Apria occupies have been offered for sublease of late, according to brokerage data.
There’s no indication the company plans to shutter its OC operations.
Tax implications, or a more centralized location to monitor its base of some 275 locations that are open to the public, would appear likely reasons behind the changing corporate designation. A similar move was made by healthcare REIT Healthpeak Properties Inc. (NYSE: PEAK) when it moved its headquarters and executive team from Irvine to Denver late last year.
Chief Executive Dan Starck, who has led Apria since 2012, and before that ran Irvine-based risk management services provider CorVel Corp. (Nasdaq: CRVL), remains based locally as are several other members of the company’s executive team, according to their LinkedIn accounts.
The company continues to hire for its local operations, with about a dozen or so tech, legal, and other positions listed on its website as of last week. Most positions allowed for telecommuting.
The company could not be reached for comment last week.
2008 Sale
Apria’s IPO filing, made Jan. 15, listed a $100 million placeholder value for the offering; industry trade publications indicate the company could have a valuation close to $800 million if the IPO is completed.
Proceeds from the offering will be used to fund acquisitions, pay down debt and other general corporate purposes.
Blackstone is the company’s main shareholder and will continue to be so post-IPO, filings indicate.
The private equity giant, with nearly $590 billion in assets under management, took Apria private in 2008, when the company was valued at around $780 million. Blackstone paid $1.6 billion for the company, including debt.
Larry Higby, the company’s longtime CEO and a well-known figure in OC’s political, arts and philanthropic scenes, stepped down from his role at Apria that year, around the time of the sale.
The past decade has seen the company move to make its business more streamlined under the new private equity ownership, shedding less profitable business units.
Its main business lines now include home respiratory therapy, including home oxygen and noninvasive ventilation services, as well as sleep apnea treatment. It also provides wound care for patients recovering at home.
In 2008, Apria was reported to have over 400 branches nationwide and more than 2 million customers, as well as annual revenue around $2 billion.
Today, it has 275 branch locations, but still services around 2 million customers.
It generated $1.1 billion in net revenue, $15.6 million in net income, and $174 million in adjusted EBITDA in 2019, filings indicate. About 20% of its 2019 revenue was reimbursed by the Medicare and state Medicaid programs, it said.
APR on Wall Street
Since the 2008 transaction, “the home healthcare industry has experienced a number of significant changes, including reimbursement, regulatory and technological changes,” the SEC filing stated.
“We have continually worked to adapt our business and organizational structure to best meet the current needs of patients, providers and payors.
“Through various strategic and operational initiatives, we have improved profitability despite reimbursement rate pressure, improving our adjusted EBITDA margin by 110 basis points from 2017-19,” it said.
While the pandemic has resulted in some declines in revenue for some of Apria’s divisions, the company has also experienced an increase in business for some of its respiratory products, such as oxygen, and the sale of ventilators to hospitals.
Apria said it intends to list its common stock on the Nasdaq Global Select Market under the ticker “APR.”
Underwriters of the IPO include Citigroup, Goldman Sachs, BofA Securities and J.P. Morgan.
