M&A activity: fast and furious in 2004

Sunday, July 18, 2004

July 19, 2004

YARMOUTH, Maine -  Trepidation over upcoming cuts to Medicare reimbursement fanned the DME industry’s mergers and acquisition activity into a red hot flame through the first six months of 2004, at least in some quarters.
“The first six months have probably been the most active six months we’ve ever had in both size and number of deals,” said Bruce Burns, president of Affinity Ventures in Albuquerque, N.M.
On the East Coast, M&A expert Rick Glass, said he brokered more deals through the year’s first six months than he did all of last year. 
“Some of the sellers were fence sitters that I’ve been working with for six or seven years,” said Glass, president of Steven Richards & Associates in Tarpon Springs, Fla.
Both Glass and Burns attributed the current M&A boom to sellers who want out before Medicare reimbursement cuts go into effect next year and to buyers who intend to negotiate the cuts by acquiring marketshare.,
The upcoming cuts also have prompted managers to think seriously about how to run their companies more efficiently.       
M&A expert Dexter Braff said  he’s seeing more commitment to technology as a way to cut costs and maintain profits when the cuts come. It’s not a “groundswell,” but it’s becoming more common to hear management talk about document imaging, e-CMNs and using transfilling concentrators to cut costs, he said.
“That is smart management,” said Braff, president of The Braff Group in Pittsburgh, Pa. “This is a hardy bunch of people who have gone through a lot of changes. It takes a confident, managerially creative and entrepreneurial spirit to find ways to successfully maneuver through this maze of legislation, and these people are good at it.”