Revere Medical Enters into Agreement to Acquire
CareMax’s Management Services Organization
Agreement in Principle Reached with “Stalking
Horse” for Core Centers’ Assets
Sale Transactions to be Implemented Through an
Expedited Prearranged Chapter 11 Plan Supported by 100% of
CareMax’s Secured Lenders
CareMax Secures $30.5 Million in Debtor in
Possession Financing to Support Operations and Continuing Provision
of Healthcare Services Throughout Restructuring Process
CareMax, Inc. (NASDAQ: CMAX; CMAXW) (“CareMax” or the
“Company”), a leading technology-enabled value-based care delivery
system, today announced it has entered into an agreement to sell
its management services organization and also announced a sale
process for the Company’s core centers’ assets (collectively, the
“Sale Transactions”). The Sale Transactions will be implemented
pursuant to a prearranged chapter 11 plan supported and funded by
100 percent of CareMax’s current secured lenders (the “Prearranged
Plan”).
CareMax has entered into an agreement with an affiliate of
Revere Medical (formerly known as Rural Health Group), pursuant to
which Revere Medical will acquire the Medicare Shared Savings
Program portion of the Company’s management services organization
(the “MSO Business”) that supports care provided to approximately
80,000 Medicare beneficiaries. The sale of the MSO Business is
anticipated to be consummated simultaneously with the consummation
of CareMax’s Prearranged Plan. The Company intends to wind down the
ACO REACH and Medicare Advantage portions of its management
services organization.
CareMax also announced that it has reached an agreement in
principle on a “stalking horse” agreement with a third-party buyer
for the Company’s operating clinic business (the “Core Centers’
Assets”). The closing of this sale is also anticipated to be
consummated simultaneously with the consummation of CareMax’s
Prearranged Plan. The Company intends to disclose the proposed
terms of the stalking horse agreement and the potential purchaser
in the coming days, when and if an agreement is finalized.
The stalking horse bid will be subject to an auction and, if an
agreement with the stalking horse bidder is not finalized in the
coming days, CareMax’s current secured lenders – who have been
providing capital to the business for the past four months – will
credit bid for the Core Centers Assets. The sale process is
intended to ensure patient and doctor continuity and CareMax’s
secured lenders are committed to supporting the business throughout
this process.
To facilitate the foregoing, CareMax has initiated prearranged
voluntary chapter 11 proceedings in the U.S. Bankruptcy Court for
the Northern District of Texas (the "Court"). CareMax has also
filed customary motions with the Court, seeking authorization to
maintain business-as-usual operations, including by:
- Continuing operations to ensure patients at its clinics
continue to receive high-quality, value-based healthcare;
- Paying associated wages, including for its doctors and nurses,
without interruption; and
- Paying the existing pre-petition claims of certain vendors that
are critical to the health and safety of CareMax’s patients and
critical to the operation of the Company's medical centers.
These motions, once approved, will help facilitate a smooth
transition into the restructuring process and ensure the Company's
medical centers and physicians can continue providing uninterrupted
service to patients.
Simultaneously, CareMax entered into a restructuring support
agreement (the "RSA") with lenders holding 100 percent of the
Company’s secured debt obligations. The RSA provides for, among
other things, the lenders’ support for the Sale Transactions and
the Prearranged Plan and the lenders’ agreement to provide CareMax
with a $30.5 million debtor in possession financing facility to
support CareMax’s operations through confirmation of the
Prearranged Plan (the “DIP Financing”).
The Prearranged Plan, the Sale Transactions, the RSA, and the
DIP Financing are subject to Court approval, as well as customary
regulatory approval and closing conditions. CareMax anticipates
that the Sale Transactions and Prearranged Plan will be consummated
in early 2025.
CareMax will continue to operate and maintain its commitment to
providing high-quality patient care and services. The DIP Financing
is expected to provide sufficient liquidity to support the
Company's ongoing operations throughout the restructuring
process.
Carlos de Solo, Chief Executive Officer of CareMax, commented,
“After a careful review of the Company’s strategic alternatives, we
have determined that the transactions announced today are our best
opportunity to protect the long-term value of the CareMax assets
and ensure our patients, providers, and health plans can continue
to rely on the comprehensive, coordinated care we provide. We are
deeply appreciative of the outstanding team members across CareMax,
whose hard work and commitment to our partners is resolute.”
Additional information regarding the Company’s court-supervised
process, court filings, and information about the claims process
can be found at https://cases.stretto.com/CareMax, a website
administered by CareMax’s claims agent, Stretto, Inc. Information
is also available by calling (855.314.3709) (Toll-Free) and
(657.660.3550) (International).
Additional information regarding the Prearranged Plan, Sale
Transactions, the RSA, and the DIP Financing, and the impact of the
foregoing on the Company’s securityholders, can be found in a
Current Report on Form 8-K to be filed with the U.S. Securities and
Exchange Commission.
Advisors
Sidley Austin LLP is serving as legal counsel to CareMax.
Alvarez & Marsal North America, LLC is serving as financial
advisor to CareMax. Piper Sandler & Co. is serving as
investment banker to CareMax. Ropes & Gray LLP is serving as
legal counsel and Guggenheim Securities, LLC is serving as
financial advisor and investment banker to the current secured
lenders.
About CareMax
Founded in 2011, CareMax is a value-based care delivery system
that utilizes a proprietary technology-enabled platform and
multi-specialty, whole person health model to deliver
comprehensive, preventative and coordinated care for its members.
CareMax operates 46 clinical centers and employs approximately
1,100 employees who serve approximately 260,000 patients across all
business lines. Through CareMax’s fully-integrated, Five-Star
Quality rated health and wellness centers, CareMax is redefining
healthcare across the country by reducing costs, improving overall
outcomes and promoting health equity for seniors.
Learn more at www.caremax.com.
About Revere Medical / Rural Healthcare Group
Rural Healthcare Group is now Revere Medical. Revere Medical is
headquartered in Nashville, Tennessee and operates an employed
medical group and provider network across six states. More
information on Revere Medical can be found here:
www.reveremedical.com
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. These forward-looking statements include statements
regarding the process and potential outcomes and timing of the
Company’s chapter 11 proceedings, the Company’s expectations
regarding the Prearranged Plan, the Sale Transactions and the DIP
Financing and the Court’s approval thereof, the Company’s
expectations regarding reaching an agreement to sell the Core
Centers’ Assets, the Company’s ability to continue to operate as
usual during the chapter 11 proceedings and the Company's ability
to pay for continuing obligations. Words such as "anticipate,"
"believe," "budget," "contemplate," "continue," "could,"
"envision," "estimate," "expect," "guidance," "indicate," "intend,"
"may," "might," "plan," "possibly," "potential," "predict,"
"probably," "pro forma," "project," "seek," "should," "target," or
"will," or the negative or other variations thereof, and similar
words or phrases or comparable terminology, are intended to
identify forward-looking statements. These forward-looking
statements reflect the Company’s expectations, plans or forecasts
of future events and views as of the date of this press release.
These forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the Company’s control, that
could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements.
Important risks and uncertainties that could cause the Company's
actual results and financial condition to differ materially from
those indicated in forward-looking statements include, among
others, the Company's future capital requirements and sources and
uses of cash, including funds to satisfy its liquidity needs; the
Company's ability to fund its planned operations and its ability to
continue as a going concern; the adverse impact of the chapter 11
proceedings on the Company's business, financial condition, and
results of operations; the Company's ability to maintain
relationships with patients, employees, doctors, health plans and
other key payers and other third parties as a result of the chapter
11 proceedings; the effects of the chapter 11 proceedings on the
Company and the interests of various constituents, including
holders of the Company's common stock; the Company's ability to
obtain court approvals with respect to motions filed or other
requests made to the Court throughout the course of the chapter 11
proceedings; risk associated with third-party motions in the
chapter 11 cases; and the other risks and uncertainties described
from time to time in the Company's filings with the United States
Securities and Exchange Commission (the “SEC”). For a detailed
discussion of the risk factors that could affect the Company's
actual results, please refer to the risk factors identified in the
Company's reports filed with the SEC. All information provided in
this press release is as of the date hereof, and the Company
undertakes no duty to update or revise this information unless
required by law, and forward-looking statements should not be
relied upon as representing the Company’s assessments as of any
date subsequent to the date of this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241117000726/en/
Investor Relations / Media Jude Gorman / Clayton Erwin /
Olivia Sherman Collected Strategies
CareMax-CS@collectedstrategies.com
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