Former Rotech president Griggs heads HME roll-up

Wednesday, April 30, 2003

ORLANDO, Fla. — Former Rotech President Steve Griggs is back in the saddle and heading a group of investors intent on rolling up a sizeable home respiratory therapy company.

AeroCare Holdings acquired two HME companies in Colorado in March, which it added to existing locations in Florida, Texas, Arkansas, Nevada and Missouri. Griggs, 45, declined to name the companies AeroCare acquired in Colorado, or any of its other operations. But the company’s game plan calls for both acquiring companies and starting branches up from scratch, Griggs said.

“Everything has gone better than expected,” Griggs said. “When you are growing and expanding, those are fun times for all employees, reminiscent of some of the older days of Rotech.”

AeroCare has been flying below the radar screen since 2000, but last November it partnered up with two private equity groups and with that cash backing now appears poised for some serious growth.

One of AeroCare’s equity backers is Ferrer, Freeman and Company, whose 16 investments generated roughly $2.1 billion in revenue. The second partner is MTS Partners.

Griggs left Rotech in 2000, several months after its parent company, Integrate Health Solutions, filed for Chapter 11 bankruptcy and dragged Rotech with it. Rotech has since spun off from IHS and is now operating as an independent company under the leadership of former Apria CEO Philip Carter.

As Griggs and company build AeroCare, they’ll focus both on rural and urban markets. In markets it enters, Griggs said, the goal is to cover a wide geography and grab significant market share. Doing so will allow AeroCare to better confront potential changes in reimbursement such as national competitive bidding or a shift to more managed Medicare, Griggs said.

“There are obstacles coming down the pike that will make it challenging, but well-run companies will do well regardless,” Griggs said. “We think we will be able to compete in today’s market and tomorrow’s.” HME