Mergers and acquisitions

Monday, March 31, 2008

The M&A market for HME remained quiet in February, despite CMS’s January announcement of the next 70 MSAs for competitive bidding.
“There hasn’t been a big surge,” said Gina Bienkowski, vice president of Ultimate Resource in Newtown, Pa. “We’re still working with the same buyers.”
It’s not that companies don’t want to do deals, but without knowing who will win bids or what reimbursement will be for competitively bid items, they can’t crunch the numbers, said Jonathan Sadock, CEO of Philadelphia-based paragon Ventures.
“As we get clarity around pricing and players it’s going to provide the ability to price these businesses,” he said. “Now, they have no way to accurately gauge the earnings of a company.”
Until then, activity in regions included in rounds one and two will continue to move at a snail’s pace, say analysts.
“I don’t see activity going up until they’ve finished the first round bidding process,” said Bruce Burns, president of Albuquerque, N.M.-based Affinity Ventures. “Once those awards have been made, there could be some activity for those areas.”
That’s not to say no one is buying, analysts say.
“We’re getting some transactions done, but it’s difficult,” said Rick Glass, president of Steven Richards & Associates in Tarpon Springs, Fla. “The smaller regional players are still acquiring.” HME