LMI: 'We're back'

Friday, April 1, 2011

MOUNT VERNON, N.Y. - Landauer Metropolitan Inc. (LMI) is back on the acquisition trail. In March, it snapped up Buffalo, N.Y.-based Kaba Healthcare and it has no plans to stop there.

"The owners didn't understand our space and wanted out," said CEO Lou Rocco. "We got a good value."

Kaba Healthcare, a subsidiary of Woodmark Healthcare Enterprises, a network of skilled nursing facilities, has about $2 million in annual revenues.

It's the first buy for LMI since a buying spree in 2009, when the provider picked up half a dozen of Air Products' HME locations, including American Homecare Supply in New York. Kaba will be folded into American Homecare Supply, said Rocco.

"We took a little bit of a break after Air Products," said Rocco. "We needed to catch our breath, and now we're back."

And back in a big way. In February, LMI restructured its credit line with an eye toward adding about $20 million in revenues through acquisitions over the next year or so. The company will focus on businesses that are at least 50% respiratory and within its geographic footprint, which stretches from Virginia to Buffalo, said Rocco.

"There's a lot of good businesses (out there)," he said. "But there's a fear of competitive bidding and future price cuts. People are looking to join a larger company or partially cash out."

LMI, which had $140 million in revenues last year, plans to take advantage of economies of scale to help it stay viable, and even grow, both in size and services. The provider has increased some of the "value-added" services it offers, including disease management programs that managed care payers find attractive. With the government providing incentives for wellness programs and other initiatives to reduce hospital stays, LMI wants a "bigger piece of the pie," said Rocco.

"It's not just about delivering a piece of equipment to the patient's home any more," said Rocco. "Those days are long gone. It's basically what other enhancements to patient care and service we can offer our referrals."