02 Science runs into unexpected trouble

Friday, October 31, 2003

TEMPE, Ariz. - O2 Science, a fast moving roll-up that’s acquired or opened 17 locations since 1999, put the breaks on its acquisition activity in September when its major investor filed for Chapter 11 bankruptcy.

“I didn’t think a $2.8 billion company would file for bankruptcy, but we’ll be OK,” said president and CEO Mark Hanley.

DVI, a medical finance company, filed for Chapter 11 bankruptcy in September. In addition to offering loans and leases to finance the purchase of diagnostic imaging and other therapeutic medical equipment, DVI offers lines of credit for working capital backed by healthcare receivables.

Since DVI filed for bankruptcy, O2 Science stopped issuing letters of intent, although, Hanley said, he is still looking at companies.

“It is a hiccup for our future acquisitions,” Hanley said. Since the bankruptcy filing, Hanley has been looking for investors who might want to buy out DVI’s ownership in O2 Science and provide cash for future acquisitions. The provider generates sufficient capital to run its day-to-day activities, he said.