Quebec company says 'oui' to HME
MONTREAL - A Canadian company that says it is eyeing the home medical equipment market here doesn't exactly have deep pockets, say analysts.
Bio-Solutions, which manufactures an organic insecticide and a nutritional supplement for poultry, announced in June that it saw the U.S. HME market as a way to grow and expand.
But the company's most recent 10-K, filed in April, lists a net loss of $632,742 for the year ended Dec. 31, 2010.
"As desperate as we all are for a knight in shining armor, we have to have our eyes wide open," said Jonathan Sadock, partner and CEO of Paragon Ventures, a Philadelphia-based M&A firm. "The company doesn't have a lot of value right now, but they are publicly held."
Bio-Solutions told Sadock that they were looking to acquire three or four companies in exchange for company stock, he said.
"They are not looking to put a whole lot of cash in peoples' hand," said Sadock. "Nor are they looking for business owners that are looking to sell their company and ride off into the sunset. They want them to continue to stay on and operate the business."
It's not surprising that our neighbors to the north would be interested in HME, say industry analysts.
"The U.S. healthcare market is among the biggest in the world," said Bob Leonard, an analyst with The Braff Group, a Pittsburgh-based M&A firm. "Canada is a very small market in every industry. They look across the border at the U.S. and say 'wow.'"
Wow is right. Home medical equipment is a $26 billion a year industry and, according to Bio-Solutions' release, it is growing at a pace of 6% annually.
Foreign companies have circled the market before, but most don't pull the trigger, said Rick Glass. He's helped several large foreign-based companies over the last few years evaluate a potential entry into this market.
"At the end of the day, they didn't decide to follow through," said Glass, president of Steven Richards & Associates, a Tarpon Springs, Fla.-based M&A firm. "I think probably a big part of what held them back was the obvious state of uncertainty in the market."
The Montreal-based Bio-Solutions is incorporated in Nevada and is trading on Over-the-Counter Bulletin Board and Pink Sheets. The company has hired consultants here to help it move forward, stated the release.