Big Deal: Air Products scores a gem

Friday, December 31, 2004

CHICAGO - Air Products Healthcare increased its presence here significantly in November when it finalized the acquisition of Ultra Care, a $32-million independent and a finalist this year for an HME Excellence Award.

“Our company was at a maximum value in the market place,” said Ultra Care CEO Bruce Callahan. “We were the number one provider; we were very profitable; we were a one-stop shop; our reputation was very positive; we didn’t win the HME Excellence Award, but we did make the finals. So we had a lot of positive things going, and they always say to sell when you are on top, not when things are going bad.”

The Ultra Care deal comes about a year and a half after Air Products acquired another premier Chicago-area provider, Dependicare, a 2002 runner-up for an HME Excellence Award. Air Products, which won an HME Excellence Award this year, will now integrate the two companies to maximize efficiency and market value, Callahan said.

Even though Ultra Care has been sold, Callahan said, he’s still bullish on the HME market. Nevertheless, with national competitive bidding on the horizon for Medicare, large companies with buying power and other economies of scale have a distinct advantage.

“We were a financially sound company, but we never had the same kind of resources as Air Products,” Callahan said. “Even at $32 million, we were not as big as we needed to be to take advantage of the synergies you need today.”

Sales of Air Products’ U.S. homecare business are now approaching $300 million. The company operates more than 60 branches serving 250,000+ patients throughout the eastern half of the United States. The company is among the top six providers of home respiratory products and services in the country. Air Products intends to strengthen its United States position by continuing to make roughly $75 million in homecare acquisitions per year, according to a company release.