Equity investors tighten HME purse strings
BEAUMONT, Texas - Industrial gas giant Praxair’s June acquisition of Home Care Supply for $245 million is another example of a wildly successful HME rollup selling for a premium, say industry watchers.
Despite the Home Care Supply deal, private equity groups that might like to finance another roll-up still see too much uncertainty in the HME market to do so. Until competitive bidding and other Medicare reimbursement issues resolve themselves, equity investors will most likely invest their money elsewhere, say industry watchers.
“We’ve talked to private equity groups in the last six months, and the common theme is that they can’t get their arms around reimbursement,” said M&A expert Dexter Braff. “They know it is a good market, but they are uncomfortable.”