AHS strategy hits the sweet spot

Thursday, October 31, 2002

CONSHOHOCKEN, Pa. — When it comes to rolling up a successful home medical equipment company, American Homecare Supply CEO Bob Cucuel and his executive team hit a home run.

"Bob started this from scratch," said M&A expert Richard Davis, vp of Paragon Ventures. "He pulled it together, and I think that is almost as significant as Air Products acquiring them. Bob did what a lot of other people haven't been able to do."

Just what did Cucuel and company do right? M&A expert Dexter Braff boiled it down to four key incidents.

4 Solid committed financing. When you have solid financing, you can embark on aggressive growth. Otherwise, you have to keep reconvincing investors to invest and you lose opportunities. "You can't be in this by dipping your toes in the water."

4 Experienced management. Cucuel started in the healthcare business in 1981. Prior to heading American Homecare Supply, he worked at American HomePatient where played a role in 30 acquisitions. Much of his current management team worked at AHP with him.

4 A focused acquisition strategy. AHS didn't stray from its East Coast geography or its competency in DME and respiratory therapy.

4 An investor-sensitive time frame. Roll-ups are intended to get in, build and sell. The ideal time frame is three to seven years. Cucuel did it in three.

"It hits the sweet spot in so many places," Braff said. "It's impressive." HME