Liberator strengthens C.R. Bard’s direct-to-consumer platform

Wednesday, November 25, 2015

STUART, Fla. – Liberator Medical got a “strong price” when it sold to C.R. Bard recently, analysts say.

Bard, a manufacturer of medical devices for vascular, urology, oncology and surgical specialty fields, agreed to pay $181 million for the provider of home medical supplies, including catheters, ostomy, diabetes and mastectomy.

“That’s a very strong price for sure,” said Rick Glass, president of Steven Richards & Associates. “Without a distributor or middleman (they could make a profit), but that’s still putting a lot of eggs in that basket.”

The deal allows Bard, which already has a direct-to-consumer catheter business, to gain an even greater foothold in that market.

But the manufacturer, one of the largest makers of catheters according to industry sources, stands to lose some business from some providers who compete with Liberator. Still, it must figure the reward will be greater, say analysts.

“They are building something that they must be confident will drive enough business using those direct-to-consumer methods and don’t have to worry about losing some customers,” said Glass.

Liberator, which offers more than 5,000 products, indicated in a press release that Bard’s products comprise “only a small minority of its current revenue” and that the company will continue to promote the products of other manufacturers.

In the release, Bard said it expected the transaction to add about $70 million to its 2016 net sales. In August, Liberator reported net revenues of $60.3 million for the first six months of 2015, a 9.9% increase compared to the same period last year. Liberator began trading on the New York Stock exchange in 2013 under LBMH. Shares soared to $3.34 in the days after the deal was announced.

Liberator was founded more than a decade ago by Mark Libratore, a former Liberty Medical exec, and has enjoyed steady growth, something the provider has long attributed to its strong marketing programs, including TV advertising.

About the only blip on the provider’s radar: a whistleblower complaint alleging a violation of the False Claims Act for engaging in kickback arrangements. Liberator said in an earnings report in August that it had settled the claim.

The deal is expected to close in the first quarter of 2016.

Liberator did not respond to a request for comment.