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Shares of Great Elm Group (GEG) spiked almost 100% to $3.99 in after-hours trading on Tuesday after announcing the sale of its durable medical equipment business for $80M. The company said Tuesday that it closed on the sale of its majority interest in Great Elm Healthcare to Quipt Home Medical (QUIP). "The successful sale of our DME business and the recently announced Forest transaction are transformative for Great Elm. When combined, the two transactions are expected to increase holding company cash by over $70 million. This allows Great Elm to dedicate more resources to scaling its Investment Management business, utilizing the expertise and relationships of our board and management team," said Jason Reese, Executive Chairman of GEG. "We continue to evaluate various strategies which could include investments in our existing funds or the acquisition of the management rights of new, long-duration capital vehicles. Additionally, the sale simplifies our reporting and organizational structure."

Quipt Home Medical (QIPT) is pleased to announce that it has acquired Great Elm Healthcare , a division of Great Elm Group (GEG) with an effective date of December 31. Great Elm operates a complete line of respiratory related durable medical equipment service locations across eight states in the Midwest, Southwest and Pacific Northwest. Based on an independent quality of earnings report, Great Elm had unaudited revenues for the 12 months ended August 31, of $60M with an Adjusted EBITDA of $13M. Establishes Quipt as a leading respiratory-focused home medical equipment suppliers in the United States with significant scale, serving 270,000 patients with 32,500 referring physicians across 115 locations in 26 states. The combination of Quipt and Great Elm has a combined Annualized Revenue and Annualized Adjusted EBITDA of $220M and $47M, respectively, based on Quipt's reported audited results for the fourth quarter ended September 30 and Great Elm's unaudited results for the 12 months ended August 31. Pursuant to the membership interest purchase agreement dated January 3 the total purchase price is $80M comprised of $73 million in cash, $5 million in assumed debt, and 431,996 Quipt common shares at a deemed price per share equal to $4.63, representing a purchase price of 6.0x Adjusted EBITDA pre cost savings and synergies. Quipt has identified $2M in cost savings and synergies, which is expected to be captured over the first six months and is expected to result in Great Elm's Anticipated Annualized Adjusted EBITDA of $15Mn, representing a purchase price of 5.2x Adjusted EBITDA post cost savings and synergies. The Anticipated Annualized Adjusted EBITDA is $49M for Quipt. Expected to be financially accretive to overall growth and cash flow. The combination of two leading clinical respiratory providers is expected to enhance Quipt's patient-centric ecosystem across the entire company by further collaborating with key sales touchpoints, including healthcare providers like hospitals, doctors, rehab centres, and long-term care facilities. With this Acquisition Quipt successfully surpasses its previously announced outlook of achieving Annualized ?Revenue by the end of calendar 2022 of $180-$190M.

Great Elm (GEG) announced its sale of a majority of its ownership interest in Forest Investments to J.P. Morgan Broker-Dealer Holdings (JPM). Transaction Highlights: GEG has sold 61% of its direct and indirect common equity of Forest to JPM for approximately $18M in cash. Together with its purchase of 20% of the common equity of Forest in December 2020, JPM owns 81% of Forest as of December 30, 2022. GEG has the right to put its remaining 19% ownership interest in Forest for cash proceeds of approximately $27M. Jason Reese, Executive Chairman of GEG, said, "The Forest transaction represents a successful outcome for Great Elm's shareholders. This marks the latest in a series of strategic actions taken to enhance our focus and capabilities across our core investment management strategy. We are pleased to have worked with JPM as a financial partner in Forest. This transaction underscores the ability for Great Elm to raise capital as it looks to grow its investment management business."