Mickey Letson goes to Harvard...at age 42
DECATUR, Ala. - As he has for the past 20 years, Mickey Letson manned a booth at this year's Medtrade show, but with one big difference. He and his father no longer own the Letco Companies. They're still major shareholders, and it's not likely that Mickey Letson is about to skip off with the prize money that comes from building and selling a successful business.
"A lot of people were concerned that I would be out of the business (after the Braff Group sold Letco to the Harvard Drug Group)," said Letson. "But I'm like--'Hey, I'm 42, what else am I going to do?"
What he plans to do is stick around, pursuing niches and specialties all over the respiratory and medications business. HME News talked to Letson recently for a perspective on what it means to sell and to stay.
HME News: Why'd you sell?
Mickey Letson: We are and have been a family owned business. My dad and I owned the company. He was ready to retire, and that left me with two options -- I could buy my dad out and mortgage the house once again, putting everything on the line as I have multiple times to finance growth. But this time, at this stage of my life, that felt like too much of a risk, building up that kind of tremendous debt. So we sold.
HME: So, it was a function of timing (retirement) and a reluctance to endure all that financial exposure again?
Letson: That, and we feel that we had to broaden into other marketplaces that we don't service now. Our limiting factor is that most pharmaceutical companies will not sell to a specialty pharmaceutical distributor. They want you to be a complete customer, even if you only need two of their products.
HME: And along comes the Harvard Drug Group...
Letson: We really liked their upper management. We liked their plans going forward. We realized that the ability to grow the company at 65% per year, as we had, was going to be more difficult. We needed someone with the synergies and access to things we didn't have.
HME: What else does Harvard enable?
Letson: They have access to any manufactured drug. We can reach up to their purchasing power and say we want this, this and this. We have by default an automatic account with most of these manufacturers. Since Harvard is full line, we don't have to be.
HME: And yet, Letco doesn't disappear in this acquisition?
Letson: The unique thing is that in most Harvard acquisitions, those companies were rolled up under their name. But they felt we were such a good strong company in our marketplace, they wanted us to remain freestanding while we expanded into other product lines and marketplaces.
HME: How much did what's happening with Medicare impact your decision to sell now?
Letson: It really hasn't. In 1988, I met the first person who ever told me that you don't want to be in this business because it's going to crash next year. The idea that it's going to be dead next year, it's comical for us. In each year, it gets better. It's still one of the nicest, best businesses in the industry.
HME: What changes do you expect your customers to see now that Harvard is in?
Letson: You will start to see a lot of new programs coming -- in home sleep qualification, an infusion program. Instead of being just a respiratory pharmacy--we'll be in infusion, and full-line compounding, anti-aging, veterinary applications and other specialty pharmaceutical classes.