Firm gives thumbs up to HME

Monday, March 31, 2008

DALLAS – Despite national competitive bidding and the specter of more reimbursement cuts later this year, private-equity group RiverRock Holdings looks at the HME industry and likes what it sees. That’s why in February the company acquired DME software vendor Dynamic Energy Systems (DES).
“This is a very good software from a technical point of view and from a users standpoint and a very interesting industry,” said Geoff Kearney, RiverRock partner. “The industry’s biggest customer focus is people over the age of 50 and that population is growing at 4%, whereas the national average is something like 1.8%. It’s a high-growth industry whose need is only going to increase in the future.”
Terms of the deal were not disclosed.
RiverRock targets small to medium businesses (under $50 million in annual revenue) that are profitable. The companies must also have competitive products and a recognizable market position. RiverRock helps the acquired companies grow by providing financial and business resources. Unlike many private-equity groups, RiverRock manages the companies it acquires. Kearney will now serve as the company’s CEO. DES President Nancy Matz will stay on to help run the company.
Kearney described the DME software market as fragmented: There’s no clear leader among the vendors and a lot of providers. That’s an attractive situation, he said.
“The opportunity to come in and build on what was already here and get a little bit more aggressive in the marketing and gain marketshare was too much of an opportunity to pass up,” Kearney said. HME