Doubly-good deal for ActivStyle, Advocate

Monday, February 8, 2010

MINNEAPOLIS - ActivStyle, a provider of incontinence products, boosted its offerings when it acquired catheter supplier Advocate Medical Services in January.

"We wanted a bundle that was a bit more diverse than just one product line," said Daniel Filippini, president and CEO of ActivStyle. "Any time you have all your eggs in one basket, it's scary."

The 12-year-old ActivStyle is backed by Riverside Company, a private equity firm. The company serves patients in 30 states through three sales channels: a Midwest sales team, TV advertising and direct mail.

The Tampa, Fla.-based Advocate Medical Services, which will keep its name, focuses mainly on Florida and Texas, two states where ActivStyle had only a minor presence.

"There were great synergies in terms of product offerings and in terms of geography," Rick Glass, president of Steven Richards & Associates, a Tarpon Springs, Fla.-based M&A firm which represented Advocate in the deal. "It's a great strategic fit."

The deal gives both companies a solid platform on which to grow, said Christopher Sellwood, vice president of sales and marketing for ActivStyle.

"A lot of the sales talking points for incontinence and urologicals overlap," he said. "We will be able to leverage the expertise of both organizations in that individual sales call."

Medicaid is the primary payer for incontinence and urological supplies; both companies also bill Medicare and private insurance. Adding scale--combined, the companies serve 30,000 patients--will strengthen their businesses in a complex market built on lower-margin products, said Filippini.

"No matter how small you are, you have to do all the various things required by Medicaid and Medicare," he said. "Frankly, it makes sense to either be a big player in it or not be a player in it (at all)."

Terms of the deal were not disclosed.