M&A: Home Medical Equipment

Originally Published by HME News on April 21, 2017

YARMOUTH, Maine – After a slow first quarter, buyer appetites for HME businesses are picking up, say M&A analysts.

“There’s still more sellers than buyers, but transactions are getting done,” said Rick Glass, president of Steven Richards & Associates. “I think we are bottoming out on the reimbursement, and we’re slowly starting to get some appetite even in the traditional HME and respiratory space.”

While reimbursement remains dire, the business-friendly new administration, along with new leadership at the Department of Health and Human Services and CMS, has analysts cautiously optimistic.

“We’re not going back to the good old days, but some fairer treatment of providers might allow them to move forward,” said Glass.

Still casting a shadow on the improving market, however, is uncertainty around what could happen to the Affordable Care Act.

“We’re seeing hesitation from people with the uncertainty over how a (healthcare overhaul) might impact Medicaid,” said Brad Smith, managing director/partner at Vertess. “If we could get some direction one way or another, I think that would help a lot.”

Where there isn’t hesitation, say analysts: Buyers—whether they are national or regional players—are looking to expand their geographical footprint. Case in point: Rotech Healthcare last week announced it had acquired Griffin Home Health Care, which has three locations in North Carolina. Rotech currently operates in 18 markets in the state.

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