BOCA RATON, Fla. - Ed Arioli, a bona fide industry legend who left the business years ago, has jumped back into the game with a plan to roll up a home medical equipment company that in five years will generate $20 million to $50 million annually.
Arioli and a group of cohorts began laying the groundwork for their plan last year when they acquired Classic Medical in St. Clair, Shores Mich. They eventually changed the company’s name to Specialized Home Medical Services, and in July acquired the ventilator division (20 patients) of Alert Medical, which operates in the Detroit area.
“We hope to get a lot bigger soon,” said Izzy Roth, an investor relations spokesman for Specialized. “I’m from the old school, don’t leave any money on the table. Whatever walks in the door, we will have the capacity to do for the patient.”
Arioli, who did not return phone calls for this story, made a name for himself as a co-owner of Mid State Medical, a very strong Michigan HME that Foster Medical acquired in 1982. While at Foster, Arioli headed the company’s development and acquisitions division and helped grow the HME’s revenue from $60 million to $300 million.
“His willingness to take some stock in Foster Medical served him well, said one industry source.
In 1984, Avon Corp. acquired Foster, and Arioli became senior vice president of the medical division. Arioli left Avon shortly before the company sold its HME holdings to Abbey Healthcare. Since then, he’s been involved in a number of non-HME business ventures.
Now he is back.
His company’s game plan calls for raising up to $5 million from investors and acquiring companies by paying a combination of cash and stock. Specialized intends to expand its presence in Michigan and open locations in south Florida, Ohio and Indiana within the next year, said Roth.
“We’re just not going to be a respiratory company just doing oxygen,” said COO Carlia Cichon. “We specialize in catastrophic injuries and ventilator-dependent patients. Everyone wants to make a difference and we are making a difference.”
By carving out a name for itself as a clinical respiratory provider willing to take on the most challenging cases, Specialized hopes to impress referral sources and in turn garner additional business.
The company offers a full array of HME, but derives 70% to 80% of its business from home respiratory services. Ventilator patients comprise 20% to 30% of the respiratory business, Cichon said.
As for growing the $1.5 million company to $20 million to $50 million in five years, “it’s easily accomplished if we keep our heads and do what we say we are going to do,” Roth said.