One of the deals responsible for self-directed care momentum in 2022 has been axed.
In September, it was announced that the special acquisition purpose company (SPAC) DTRT Health Acquisition Corp. (Nasdaq: DTRT) would be merging with Consumer Direct Holdings (CDH). A new aging-in-place public company would be formed, reportedly one worth $681 million.
That is no longer the case. As of this week, that deal has been terminated, according to an SEC filing.
“On Jan. 4, 2023, the Company received a notice of termination of the Merger Agreement from CDH,” the SEC filing read. “The Notice terminates the Merger Agreement as of Jan. 11, 2023. By virtue of the termination of the Merger Agreement, all other ancillary agreements related to the Business Combination terminate in accordance with their terms.”
DTRT Chairman and CEO Mark Heaney told Home Health Care News in an email that he could, at this time, “not add anything beyond that which is referenced in the announcement.”
Once the arranged merger was completed, the Missoula, Montana-based Consumer Direct Holdings – a self-directed home care services company – was supposed to become a public company. DTRT was funding the deal through cash in trust and “up to $150 million” in debt financing.
Consumer Direct President and CEO Ben Bledsoe also confirmed the termination to HHCN, but could not add anything further.
Consumer Direct’s network currently spans across 14 states through its 35 locations.
“As a result of the termination of the Merger Agreement, the Company’s sponsor, DTRT Health Sponsor LLC, has informed the Company that it will not contribute any additional funds to the Company’s trust account,” the SEC filing read. “Accordingly, the Company will liquidate and dissolve as soon as practicable in accordance with the Company’s charter.”
DTRT’s leader, Heaney, is the former president and CEO of Addus Homecare Corp. (Nasdaq: ADUS).
“Here’s what’s exciting: There’s no one size fits all,” Heaney told HHCN of the deal in September. “There are more people that need home care right now than when I started this sentence. In some cases, it’s more appropriate for agency-directed care, and in many cases, it’s more appropriate for self-directed care. The whole balloon is growing.”
Meanwhile, Bledsoe told HHCN in early December that the company was at an “inflection point” that made it the right time to go public.
“We could see that at some point we were going to need some help with our ambition appetite and our continued growth,” Bledsoe said on HHCN’s Disrupt podcast. “So, having this deal come in, and seeing that we could use that capital and put it to good use, we [thought] it could change the way we’re viewed in the community. And that we could be the first self-directed personal care provider to go public.”
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