Mum’s the word on AHP sale

‘If I were a PE firm I’d be saying, ‘Do I want to be a big player in this market?’’
Friday, July 10, 2015

BRENTWOOD, Tenn. – It has been radio silence since word got out six months ago that American HomePatient is reportedly courting buyers, analysts say.

“I haven’t heard of live interest in any of the nationals,” said Rick Glass, president of Steven Richards & Associates.

The Deal, a publication that offers news and analysis about mergers and acquisitions, reported in December that AHP had retained Jefferies & Co. to explore a sale.

AHP was acquired by Highland Capital Management in 2010 in an effort to avoid bankruptcy. Typically, PE firms hang onto investments for five to seven years, say analysts.

If the provider, which serves more than 1 million patients annually through 250 locations, is indeed still on the market, it could be that it can’t find a buyer.

“If I were a PE firm I’d be saying, ‘Do I want to be a big player in this market when Blackstone can’t get out of it?’” said Don Davis, president of Duckridge Advisors.

In November, The Blackstone Group, which acquired Apria Healthcare in 2008, was reportedly exploring a sale. A company official denied it in an email to HME News.

Davis also pointed to the high-profile bankruptcy of Landauer Metropolitan in 2013, and the failed merger agreement between Orlando-based AeroCare and MergeWorthRx in 2014 as signs that the appetite for large-scale HME providers may be waning in the face of ongoing industry problems.

“When you look at what’s happening with AeroCare, with Apria, with LMI, it would lead me to think there’s a lot of reluctance to pay what (Highland) probably wants to get out of AHP,” he said.