DTRT Health Acquisition Corp. *

The below-announced combination was terminated on 1/5/23.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: Consumer Direct Care Network, Inc. [Terminated 1/5/23]

ENTERPRISE VALUE: $691 million

ANTICIPATED SYMBOL: CDCN

DTRT Health Acquisition Corp. proposes to combine with Consumer Direct Care Network, Inc.

CDH is a self-directed in-home personal care network whose services and operating models address the crucial role of in-home personal caregiving as part of the healthcare continuum. CDH provides services under agreements with state Medicaid agencies, federal Veterans Administration providers, local government agencies, managed care organizations, commercial insurers and private individuals.

Care provided in the home generally costs less than facility-based care and is preferred by clients and their families. Self-directed care also provides significant value to state Medicaid agencies and managed care organizations, including lower cost of services and higher satisfaction rates versus care in a facility or through a traditional home care agency. CDH’s expertise and experience provides significant competitive advantages when responding to requests for proposals and in creating unique program attributes required by some payors.

EXTENSION – 12/12/22 – LINK

• The SPAC approved the monthly extension from December 7, 2022, to March 7, 2023
  • In order to support the Extension Amendment, the Company, and its sponsor, DTRT Health Sponsor LLC, have agreed that, if the Extension Amendment is implemented, the Sponsor or one or more of its designees will contribute to the Company’s trust account an aggregate amount equal to $300,000 for each calendar month – LINK
  • Stockholders holding an aggregate of 19,779,227 shares of the Company’s Class A common stock exercised their right to redeem their shares for approximately $10.20 per share of the funds held in the Company’s trust account, leaving approximately $33,402,698 in cash in the trust account after satisfaction of such redemptions and following the deposit of the additional funds into the trust account.

SUBSEQUENT EVENT – 12/1/22 – LINK

• The Special Meeting has been adjourned from December 1, 2022, to December 6, 2022.

TRANSACTION

• The transaction is expected to deliver $234 million of cash held in DTRT’s trust account (assuming no redemptions) and up to $150 million in debt financing, in addition to $99 million of cash on CDH’s balance sheet, which will fund the purchase price and transaction expenses, CDH product development and further geographic expansion.
• The transaction implies a combined pro forma enterprise value of approximately $691 million or 10.1x projected pro forma 2023 Adjusted EBITDA.
• The transaction is expected to close in Q1 2023
• CDH’s current equity holders will own approximately 61% of the pro forma company immediately after closing, assuming no redemptions.
• The existing CDH shareholders will also receive a portion of their consideration in cash.
  • The cash consideration is expected to be $118.35 million, less certain advisor expenses, and the remainder of the aggregate consideration will be paid in shares of common stock of New Pubco. The stock consideration is subject to the following adjustments:
    • (i) an increase for CDH’s cash on hand as of closing
    • (ii) a decrease for CDH’s indebtedness as of Closing
    • (iii) a decrease for certain advisor expenses
    • (iv) an increase or decrease for CDH’s working capital as compared to a working capital target
    • (v) an increase or decrease for the amount by which CDH’s transaction expenses are less than $7 million
    • (vi) an increase for credited expenses paid by CDH.

PIPE

• There is no PIPE for this transaction

EQUITY EXCHANGE AGREEMENT

• HCT owns a 20% limited liability company interest in Consumer Direct Care Washington, LLC and CDH owns an 80% limited liability company interest in CD Washington.
• HCT will transfer its interest in CD Washington to New Pubco, which New Pubco will contribute to CDH, with CDH becoming the sole member of CD Washington effective as of closing.
  • New Pubco will issue to HCT 430,000 shares of New Pubco common stock and has entered into a Management Services Agreement pursuant to which HCT will, following the closing, continue to provide management services to CD Washington in exchange for a monthly management fee equal to $0.50 multiplied by the number of active CD Washington employees employed as an individual provider.

LOCK-UP

• Company and Sponsor
  • One year following the Closing Date or the shares equal to or exceed $12.00 for any 20/30 trading days at least 151 days after the Closing
  • Both parties are also restricted from transferring warrants until the end of the 30th day after the Closing

NOTABLE CONDITIONS TO CLOSING

• DTRT obtaining financing satisfactory to CDH.
• There is no minimum cash condition required at closing.

NOTABLE CONDITIONS TO TERMINATION

• By either DTRT or CDH if the effective time of the Second Merger has not occurred within 270 days following the date of the Merger Agreement (6/26/2023)

ADVISORS

• Bank of Montana is acting as financial advisor to CDH.
• Deutsche Bank Securities Inc. is acting as financial advisor to DTRT.
• Holland & Hart is acting as legal counsel to CDH.
• Winston & Strawn is acting as legal counsel to DTRT.
• Lincoln International, LLC provided the Board of Directors of DTRT with a fairness opinion regarding the transaction.
• Blueshirt Capital Advisors is serving as investor relations advisor to CDH.

MANAGEMENT & BOARD

Executive Officers

Mark Heaney, 65
Chief Executive Officer and Director

Mark Heaney has over 40 years of experience in the delivery of in-home care, including personal care, home-health care, pediatric home care, adult day services, group homes, and home-based mobile services and home-health coding. Mr. Heaney has extensive experience with Medicare, Medicaid, managed care, veteran’s benefits, commercial insurers and private pay. Mr. Heaney spent 31 years at Addus HomeCare serving as the Chief Operating Officer for 23 years and its Chief Executive Officer and chairman of the board for eight years. After being acquired by a private equity firm in 2006, Mr. Heaney, as the then-CEO, led Addus’s successful initial public offering in 2009. During his tenure at Addus, by way of an equal mix of organic growth and acquisition, the company grew from a single location to employing over 17,000 health care personnel and serving over 50,000 patients annually from 120+ locations in 23 states. Mr. Heaney was previously elected to the board of directors of the National Association for HomeCare and Hospice (“NAHC”), where he served for six years. He also served as the chairman of NAHC’s Private Duty section and co-founded and served on NAHC’s Medicaid Council. In addition to his active participation on numerous trade-related state home care associations, in 1998, Mr. Heaney co-founded the Illinois Association of Community Care Providers Association for Home Care, where he served as a board member. Mr. Heaney additionally served on the board of advisors for Lincoln HealthCare Events, where he focused on the company’s HomeCare 100 and HealthCare Capital conferences. Mr. Heaney is a frequent speaker at industry conferences and has testified before multiple state legislative policy and budget committees, as well as having testified before the House of Representatives’ Veteran’s Affairs Committee. Currently, Mr. Heaney serves as either a board member or board advisor to CellTrak Technologies, SelectData, QMerit, Arrow HomeCare and TradeWinds Services. Mr. Heaney is an active member of the Medicaid Partnership for HomeBased Care, a DC-based industry policy group. Mr. Heaney is a graduate of Loyola University of Chicago and has completed coursework toward a Masters in Liberal Arts degree from the University of Chicago (thesis pending).

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Arion Robbins, 36
Chief Operating Officer

Arion Robbins has over 15 years of experience in the financial services industry and has spent the last ten years as a private equity investor focused on healthcare and business services. Most recently, Mr. Robbins was a Principal at Revelstoke Capital Partners, a Denver-based healthcare private equity firm where he was responsible for sourcing, evaluating and strategically growing healthcare portfolio companies. There, Mr. Robbins led investments in or consulted for dozens of companies across multi-site healthcare, physician practice management, post-acute services, healthcare IT, diagnostic services, and medical product distribution, among others. Mr. Robbins began his institutional career in New York City where he held roles at Tenex Capital Management and Barclays Capital. Prior to his time in New York, Mr. Robbins worked in the Private Client Group at Wachovia Securities. He has served on numerous healthcare boards, including OnSite Mammography, DataLink Software, Crossroads Treatment Centers, and Trident USA, and he currently serves as an advisor to the boards of MainStreet Urgent Care and BioDerm, Inc. Mr. Robbins is a frequent panelist at healthcare industry conferences across the country. Mr. Robbins holds a B.A. in Economics from the University of Pennsylvania and is a Chartered Financial Analyst.

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Don Klink, 62
Chief Financial Officer and Director Nominee

Don Klink, MBA, CPA, CGMA brings over 35 years of experience in a variety of industries, including over a decade’s worth of healthcare services experience. Since 2019, Mr. Klink has served as the Chief Financial Officer of United Dental Partners, a provider of dental services across the United States. From 2016 to 2018, Mr. Klink served as the Chief Financial Officer for VNA Health Care, a company that provides healthcare services to clinics and homes alike to over 100,000 patients. Mr. Klink also served as the Executive Vice President, Chief Financial Officer, Treasurer and Secretary of Addus HomeCare from 2015 to 2016. He has also served on the Illinois CPA Society Ethics Committee which ensures that licensed CPAs follow required audit and ethics rules. Mr. Klink is a Certified Public Accountant (CPA), Chartered Global Management Accountant (CGMA), holds his MBA from the University of Chicago – Booth School of Business and obtained his BS in Accounting from Bradley University.

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Board of Directors

Jeannee Parker Martin, 66
Director Nominee

Jeannee Parker Martin is the President & CEO of LeadingAge California and the Vice Chairman of The Corridor Group Holdings. Ms. Martin has over 40 years of experience as a leader in the strategic development and delivery of healthcare programs, including home health, personal care services, hospice, long term care, technology and multi-payer programs. Ms. Martin has extensive experience in the delivery and development of health care programs around the world – spanning the United States, Central and South America, Thailand and Turkey, and has worked alongside the World Health Organization and U.S. Department of State. In 1984, Ms. Martin founded the first AIDS Home Care & Hospice Program in the U.S. and is internationally recognized as an early pioneer in AIDS care and service delivery. In 2019, she was appointed to the California Master Plan for Aging Stakeholder Advisory Committee to chart the ten-year roadmap for California’s older adult population. In 2020, she was appointed to the federal CMS Coronavirus Commission on Safety and Quality in Nursing Homes to help identify strategies and recommendations to the U.S. response in nursing homes. Ms. Martin has served on 18 boards of directors and has led various key committees, including governance, finance, compensation, development, CEO search and strategic planning. Of note, Ms. Martin served on the boards of the National Association for Home Care & Hospice and the National Hospice and Palliative Care Organization, and is currently an advisor to several health care focused technology companies. She brings sound guidance to boards and executive teams, and has provided advice on a wide range of matters based on her knowledge of particular industries, philanthropic foundations and civic organizations. Ms. Martin has received numerous awards at the local, state and national level, including being inducted into the National Association for Home Care & Hospice Hall of Fame, the Georgetown University School of Nursing Alumna Award, the California Lillian O’Brien Award, and a nomination to MedPac (the Medicare Payment Advisory Commission). She served on the Georgetown University Leadership in Nursing Think Tank and the University of California School of Nursing Home Care Advisory Council. Ms. Martin received her Master’s Degree in Public Health from Yale University School of Medicine and her Bachelor’s of Science in Nursing from Georgetown University.

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Dipa Mehta, 38
Director Nominee

Dipa Mehta serves as the lead for the Corporate Development and Ventures group at Advocate Aurora Enterprises (“AAE”), a subsidiary of Advocate Aurora Health, which is one of the largest healthcare organizations in the United States. Ms. Mehta has over 15 years of experience in the healthcare and financial services industries and has served in various roles as a venture capital investor in the healthcare technology and services sectors. Since September 2019, Ms. Mehta has served as an Investor in Residence with the Polsky Center for Entrepreneurship at the University of Chicago – Booth School of Business, where she advises students and teaches workshops. Ms. Mehta was formerly a Managing Director at Sandbox Industries, a venture capital firm that is the investment manager to the Blue Venture Fund. The Blue Venture Fund is a unique collaboration between Blue Cross Blue Shield (“BCBS”) companies, BCBS Association and Sandbox. During her time at Sandbox, Ms. Mehta served on the boards of Contessa Health, Upward Health, Oncology Analytics, AbleTo, and Lumiata. Prior to Sandbox, Ms. Mehta was at Amgen Ventures, the corporate venture fund of Amgen. Ms. Mehta started her career in the Global Healthcare Investment Banking Group at UBS and the Healthcare Fund at Paul Capital Partners, which invested in late-stage pharmaceutical and biotechnology companies. Ms. Mehta holds a BS from the New York University Stern School of Business and an MBA from the University of Chicago – Booth School of Business, where she received the Chicago Booth Leadership Award of Distinction. Ms. Mehta has also completed the Kauffman Fellowship, a prestigious two-year program for venture capitalists.

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Mary Ann Christopher, 64
Director Nominee

Mary Ann Christopher is a strategic health care executive and board member with a 40-year record of innovation and market expansion at leading payor, provider and health-technology companies. During the course of her career, Ms. Christopher has led mergers, integrations and turnarounds at several multibillion-dollar organizations, launched far-reaching community health initiatives and drove aggressive growth and diversification strategies. Since 2019, Ms. Christopher has served as a Senior Operating Advisor for LLR Partners, a private equity firm that invests in technology and healthcare businesses. Additionally, since 2015, Ms. Christopher has served as a Strategic Advisor to Medalogix, a data-science company focused on the home health market. From 2016 to 2019, Ms. Christopher served as a corporate officer at Horizon Blue Cross Blue Shield of New Jersey where she led a broad expansion of services to establish the company’s role as the lead private insurer in the state, including the development of a statewide payor/provider system. From 2012 to 2014, Ms. Christopher was the President and Chief Executive Officer of the Visiting Nurse Service of New York, the largest non-profit home care and hospice company in the country with approximately $2 billion in annual revenue and over 18,000 interprofessional team members. From 2001 to 2011, Ms. Christopher was the chief executive officer of the Visiting Nurse Association Health Group of New Jersey (“VNA”). While at the VNA, Ms. Christopher helped scale the company’s statewide enterprise through acquisitions, joint ventures and service diversification to include home health, hospice, private duty, community based mental health, federally qualified health centers and school-based health services. Prior thereto, she held various leadership positions within VNA beginning in 1983, including serving as Chief Operating Officer for 12 years. Ms. Christopher currently serves as a board member for RestorixHealth, Unitek Learning, Hazel Health, Legacy Hospice and True Learn, and has served as a board member for both Orbis Education and Medbridge Education, facilitating their growth, profitability, and successful exits. In addition to her professional work, she is a Board Regent at Seton Hall University, was a founding member and currently serves as the Vice Chair of the Hackensack Meridian School of Medicine, serves on the Board of CHAP (Community Health Accreditation Partner) and is a past board member of National Association of Home Care and Hospice. She served as a congressional appointee to the National Advisory Council on Nursing Education and Practice for the U.S. Department of Health and Human Services. She has written extensively and appeared at hundreds of national health care conferences, including the World Congress Summit in Washington, DC, and the national conference for the Center to Advance Palliative Care. She has presented to international audiences on the topics of health care equity, access and financing. Ms. Christopher has received numerous honors including the NJBIZ’s list of the Best 50 Women in Business, the Top 50 Most Powerful Health Care Leaders in New Jersey and was awarded the prestigious American Nurses Association Honorary Human Rights Award. Ms. Christopher has a Master’s of Science in Nursing from Seton Hall University, a Bachelor’s of Science in Nursing (summa cum laude) from Fairfield University and was awarded honorary doctoral degrees from both Fairfield University and Monmouth University.

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