Praxair acquires Home Care Supply for $245 million
June 14, 2004
BEAUMONT, Texas - Â In what appears to be the largest deal ever involving a privately held HME, industrial gas giant Praxair has agreed to pay $245 million to acquire Home Care Supply.
The Beaumont, Texas-base HME and respiratory provider operates 59 locations in 13 states, and last year generated $169 million in revenue.
Boards of both companies have approved the deal, which is expected to close by the end of the month. Praxair is buying Home Care Supply from New York-based equity firm Harvest Partners.
In early 2001, Praxair completed several sizeable acquisitions (Interwest Home Medical, Falls Medical and Healthcare Partners), but since then has been relatively quiet on the M&A front.
The Home Care Supply deal proves that Praxair is committed to the HME market - despite numerous Medicare reimbursement cuts scheduled to kick in over the next few years, said M&A expert Rick Glass, president of Steven Richards & Associates in Tarpon Springs, Fla.
In 2002, Praxair competitor Air Products paid $165 million to acquire American Homecare Supply, which at the time generated $110 in revenue. Both gas companies now possess strong HME platforms to expand upon, say industry watchers.
According to the Associated Press, George Ristevski, president of Praxair Healthcare Services, said, "The acquisition of Home Care Supply is a good organizational fit with Praxair and gives us service capabilities in 27 states.
"It also increases the density of our Northeast operations and significantly expands our presence from the mid-Atlantic to Texas. Our combined industry expertise and geographic reach will provide an excellent platform for sustained growth and will further accelerate our hospital to home strategy," he said.
Home Care Supply's current management team is expected to continue with Praxair. Todd Christopher, Home Care Supply's president and CEO, will become vice president, U.S. Homecare, the chief operating role for Praxair's U.S. homecare business.
Praxair had 2003 sales of $5.61 billion. Once the acquisition of Home Care Supply is completed, the health-care business will account for about 13% of Praxair sales worldwide, according to the Associated Press.