Investors target wound care

Sunday, August 30, 2009

RADNOR, Pa. - The market for regular and bariatric wound care products just got a little more interesting thanks to a trio of private equity investors with deep pockets.

The three companies--Aurora Capital Group, Hollywood Capital and Moelis Capital Partners--joined forces recently to merge RecoverCare and MedaStat, creating a wound care distributor with revenues approaching $200 million, according to Hollywood Capital Chairman Mark Bidner.

Bidner, who will serve as CEO of the combined company, called Recovercare, isn't shy about what he thinks the deal signifies for the highly fragmented wound care distribution market, calling it "the transformation of the industry."

"It creates another national alternative in a marketplace where there are very few strong national alternatives and a plethora of middle and regional players," he said.

The investors like the market's double-digit growth, and they have "significant liquidity to invest in equipment, personnel, technology and acquisitions as we move forward," Bidner said.

The combined companies now have the economies of scale to offer more timely deliveries (from 158 locations nationwide) and to allow providers to consolidate purchasing on "a broad base of cost-effective quality products," he added.

RecoverCare's wound care and bariatric products serve multiple markets--acute, post acute and home care--and include support surfaces, beds, chairs, air cushions for chairs, negative pressure wound care therapy products and patient fall prevention equipment.

While homecare represents the company's smallest revenue stream, it's a "critical component of the continuum of care" and "a market we will look to grow," Bidner said.

"For many reasons, some tied to Medicare's desire to move patients to the lowest cost place, which tends in many places to be the home, we believe it is incumbent on us to provide services in the homecare market to serve that need," he said.