Ready to go big
HARRISBURG, Pa. - After 30 years in the home medical equipment business, provider Terry Luft is ready for the big time.
His company, Dynamic Healthcare Services (DHS), was acquired in January by Newtown Square, Pa.-based GMH Ventures, a family-owned private equity firm. The deal will allow DHS to build scale, something Luft says is crucial for survival.
"Our goal is to put a very large footprint on the state of Pennsylvania (and its border states)," said Luft, CEO. "There's plenty of organic growth on the drawing board, and there's also lots of quality companies out there (to acquire)."
DHS is the parent company of Harrisburg-based Central Medical Equipment, with locations in York and Lancaster; and Pittsburgh-based ESMS Home Medical, with a location in Butler. It has 70 employees and about $10 million in annual sales.
The deal marks GMH Ventures' first foray into the HME market. Michael Holloway, executive vice president of GMH, says that the demographics for HME make it an attractive space, despite the threat of competitive bidding and other pressures.
"The pendulum can only swing so far," he said. "People prefer to be in the comfort of their own homes when it comes to medical care. At some point, HME providers working with governmental agencies will strike the necessary balance.
While it's not unusual to hear deals about large national providers getting acquired by a private equity firm, GHM sees an advantage in growing at the opposite end of the spectrum.
"We think there's an opportunity to grow a company into a strong regional player that is attractive at the larger national level," said Holloway. "But it is imperative to have the right organization to build a platform on. (DHS) has an A-plus management team that can really take on the growth."