CareMax to sell management services organization, core centers’ assets

CareMax (CMAX) 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. 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. 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 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 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. CareMax has also filed customary motions with the Court, seeking authorization to maintain business-as-usual operations. Simultaneously, CareMax entered into a restructuring support agreement 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 $30.5M debtor in possession financing facility to support CareMax’s operations through confirmation of the Prearranged Plan.