SAN DIEGO - An investor group that includes former Apria CEO Jerry Jones recently acquired a $30 million HME that was feeling financial strife after it filed for bankruptcy in November.
Westar Capital, an experienced healthcare investor, acquired the San Diego-based LifeCare Solutions in July in partnership with Jones. Jones recognized the company’s potential in southern California’s regional market.
Jones also was attracted to LifeCare’s hand in both the respiratory and infusion businesses.
“We felt like if we could do some of the basic things that make homecare businesses success that we could have a business that would be a major provider in both the infusion and respiratory business areas,” Jones said.
To ensure this success, the new leadership have made some quick changes to LifeCare’s product line.
In the past, the company has carried a product line dominated by home infusion products - nearly 60-75% of its inventory. Now, the company is trying to reach a 50-50 mix of infusion and respiratory products, according to Tom Robbins, LifeCare’s new president and CEO. Robbins also is a former executive vice president of operations at Apria Health-care, who served the company after Jone’s departure.
“A balance of the business is what our referral sources are demanding from us,” said Robbins. “We still believe that respiratory is a great business to be in, so we want to give it equal focus.”
The business strategy is to aggressively grow LifeCare’s nine existing locations in California, Arizona and Washington by focusing on sales organization, said Robbins. He plans to double the size of the company’s sales team in the coming year.
LifeCare also will consider future acquisition opportunities that are “conducive to our existing business,” Robbins said.
“We are not just going to go out and grow any business,” said Robbins. “We want our business to be good business. We want great relationships with our partners, our payers and our referral sources.”
LifeCare Solutions filed for bankruptcy following the collapse of the factoring company National Century Financing Enterprise, which was Life-Care’s principal lender.
NCFE filed for Chapter 11 bankruptcy last November after missing $30 million in payments to roughly 60 providers. Its filing led to the bankruptcies of several of NCFE’s clients when they became strapped for working capital.
“It’s my understanding that [LifeCare] filed bankruptcy 100% because of NCFE’s filing,” said Robbins.
Despite LifeCare’s recent financial woes, Westar Capital was confident the company could regain its foothold in HME markets, said company officials.