Market Street enters diabetic M&A frenzy

Monday, February 28, 2005

JUNIPER, Fla. - iCare Medical Supply, a full-service diabetic supply company, turned its ownership over to a private equity firm in January, a move industry watchers say is becoming more and more common.

Market Street Finance acquired the iCare companies as part of a platform acquisition. Market Street also created Market Street Medical, Inc., a holding company that will bring the five iCare companies together under a single operating entity.

“I think the company had grown to a point where iCare’s two owners had decided to either sell it or partner with someone to really take it to the next level,” said Bob Ciardi, president of Boston-based Provident Health Partners, which helped broker the deal for iCare.

Market Street Medical will continue to operate the under the iCare brand, and the companies two founders will play a role in the new management structure.

iCare Medical Supply was founded in 2000 and quickly grew to a nationwide presence with 20,000 patients. Its core focus is on diabetic supplies, and its sister company, iCare Pharmacy, provides respiratory medications.

“In its relatively short history, iCare has benefited greatly by creating a culture of customer and patient satisfaction coupled with an exceptional workplace environment,” Chris Baker, co-CEO of the new company, said in a press release. “We feel this incredible base of existing patients and loyal employees provide us with a solid foundation for the future growth of iCare.”

Provident Health Partners said they expect to see a rash of consolidations in the diabetes market in 2005, due in part to shrinking Medicare reimbursements.

“The Polymedicas and the Liberties have better buying power than the smaller companies,” said Michael Patton, senior director of mergers and acquisitions for Provident Health Partners. “I think everyone in the lower to middle tier in the diabetic market is bracing themselves for the cuts that are coming, and a lot of big consolidators are out there feeding off that and getting as many small companies as they can at almost a discounted prices.”

At press time, Provident was preparing to close another diabetes acquisition. Closely following iCare, Access Diabetic Supply, a national provider of direct-to-consumer diabetes testing supplies, also announced its acquisition by Owens & Minor, a Fortune 500 distributor of national name-brand medical and surgical supplies and a healthcare supply chain management company.