Lincare pursues bolt-on acquisition in AHP

Monday, December 7, 2015

CLEARWATER, Fla. – It’s official: Lincare has entered a definitive agreement to buy American HomePatient from Highland Capital Management.

Rumors surfaced this fall that a deal was in the works between the two nationals, with industry analysts speculating that Highland Capital wanted to cut its losses before CMS expands competitive bidding pricing nationwide on Jan. 1. Dallas-based Highland Capital bought Brentwood, Tenn.-based AHP in 2010 in a move that largely saved the provider from bankruptcy.

Lincare and AHP announced today that they expect the deal, which is subject to customary approvals and regulatory review, to close in the first quarter of 2016.

AHP has reportedly been on the market since last year.

“This decision follows many months of strategic research and careful consideration to determine the best opportunity for our company,” said Mark Lamp, AHP’s president and CEO. “We are pleased to have found a partner in Lincare that placed a value on our growth, performance and experience.”

The news of the agreement comes on the heels of Linde, Lincare’s owner, cutting its profit target for 2017, sending shares sliding. One reason for the cut: The company underestimated the impact of competitive bid pricing, according to news reports.

Linde’s chief executive, Wolfgang Buchele, told reporters on a recent call that, “We are confident by continuing with smaller bolt-on acquisitions that we are able, at the latest in 2017, to get back to a more normalized growth path.”

AHP focuses primarily on respiratory services and serves more than 1 million patients through about 250 locations.

Lincare had about 1,100 locations when Linde acquired the provider for $3.8 billion in 2013.