Home infusion goes big

Several years of consolidation has created several large-sized companies
 - 
Friday, February 20, 2015

YARMOUTH, Maine – The only thing standing in the way of more robust activity in the home infusion space is the limited number of properties available, say M&A analysts.

“It’s still a good market, —there are’s still transactions getting done,” said Reg Blackburn, managing director of specialty pharmacy and infusion services for The Braff Group. “It’s just slowed down a bit.”

Several years of consolidation have created a market with just a few large-sized companies: Coram, which CVS Caremark acquired in late 2013; BioScrip, which sold its home health business in February 2014 so that it could focus on home infusion; and Walgreens, which last month sold a 51% stake in its home infusion business.

One of the most active buyers: the private-equity-backed AxelaCare, which in January acquired Davie, Fla.-based Ambient Healthcare.

“That was a big good transaction,” said Blackburn. “Ambient is a privately held, multi-state company and now there’s one less regional player.”

AxelaCare also made several buys in 2014, including Advanced Care in New York in October, ARC Infusion in California in February and SCP Specialty Infusion in Chicago in January. The provider now has 34 infusion pharmacies, and has experienced yearly growth of 30% to 40% since 2010, according to its website.

The recent Walgreens deal speaks volumes about the confidence in the market, analysts say.

Several years of consolidation have created a market with just a few large-sized companies and many smaller ones: Coram, which CVS Caremark acquired in late 2013; BioScrip, which sold its home health business in February 2014 so that it could focus on home infusion; and Walgreens, which in January sold a 51% stake in its home infusion business (see related story).

“There’s a lot of strong talent attracting sophisticated, experienced investors,” said Justin Ishbia, founder and managing partner of Shore Capital Partners, a private equity firm.

Although buyers prefer to buy larger, regional companies, mom-and-pop infusion pharmacies have their own appeal, said Ishbia.

“It’s hard for a larger player to break into a new market,” he said. “Home infusion is a local business.”

One thing working in the industry’s favor is the rapid growth of demand for pharmacy services, say analysts.

“Home infusion and specialty pharmacy are growing so rapidly that I think you are going to see quite a few other transactions occurring,” said Jonathan Sadock, managing partner/CEO of Paragon Ventures.

Tags: