Infusion deals break records
The appetite for home infusion companies shows no sign of abating, with hungry buyers pushing the number of deals in 2007 into record-breaking territory, say analysts.
The number of completed deals for home IV companies in 2007 was 25, a 32% increase over 2006.
"People are clearly looking to get into this space," said Dexter Braff, president of the Pittsburgh-Pa.-based The Braff Group. "A lot of people simply want to get into the healthcare arena. Infusion is an attractive entry point."
Of the top 10 deals in 2007, five were infusion-a first, says Braff, who has tracked such data since 2001. Walgreens led the pack with its $850 million acquisition of OptionCare in June. In December, Apria grabbed Coram for $350 million.
Despite such high-profile transactions, the majority of deals being done are still in the $2 million to $10 million range, said Bruce Burns, president of Albuquerque, N.M.-based Affinity Ventures.
"The big ones get the publicity," said Burns. "But the space is fairly narrow so there are not many larger quasi-national regional companies out there. I would say there are going to be more middle market micro deals done."
Those deals include roll-ups by regional players expanding their footprint and private equity firms with established platforms in the arena, said Gina Bienkowski, vice president of Ultimate Resource in Newtown, Pa.
"We have a lot of good solid buyers with financial backing that want to build a company of size," she said. "The regionals are getting bigger, and the market looks solid through the year."
Overall, the home IV market should continue its upward trend, watchers say.
Investment in biopharmaceuticals is also fueling growth and opening up markets, including specialty pharmacy, which meshes nicely with home IV, says Jonathan Sadock, a managing partner with Philadelphia-based Paragon Ventures.
"You're seeing the convergence of those two niches for all the same reason why in the past you saw it with respiratory and CPAP," said Sadock. "The back office is the same, the pharmacy licenses are similar, and the talent and technique of the employees are the same." HME