Rehab, urology: The not so odd couple
DALLAS - Some small rehab providers who fear "they're not going to make it" under competitive bidding and other Medicare changes are seeking refuge in a large provider of urology supplies.
Freedom Fighters of Abilene, Texas, and Lone Star Mobility of Odessa, Texas, sold their assets to In Home Products six and two months ago, respectively. The Dallas-based In Home Products brought on board the employees at both companies, including three of the four assistive technology suppliers in West Texas.
"Freedom Fighters was a $1.3 million per year company, and if you're not doing $10 million, you're not going to survive," said Jeff Day, formerly CEO of Freedom Fighters and now vice president of rehab for In Home Products, said of NCB.
Merging with In Home Products, the fourth largest provider of urology supplies in the United States, gives Freedom Fighters and Lone Star Mobility the bulk they need to compete. It also gives them the financial resources to expand their product offerings, said Ron Schneir, president and owner of In Home Products.
Before the mergers, Freedom Fighters added lifts and orthotics to its business mix, but it "never had the funding to really expand" those product categories, Day said.
The mergers make for a good marriage for In Home Products, too. While Freedom Fighters and Lone Star are small companies, with just under $2 million in revenues per year combined, their customer bases are "worth gold," Day said.
"[In Home Products] was looking to finger out into other markets, and rehab was appealing because 75% of wheelchair users also use urology products," he said.
Other rehab providers may soon be following in Freedom Fighters and Lone Star Mobility's footsteps. In Home Products is "actively seeking" to acquire a handful of other companies in Texas, at least two of which are rehab providers, said Schneir, who has tasked Day with acquiring "six companies in six months."
In Home Products is even on the prowl for rehab providers in Harris County that were browbeaten by Wheeler Dealer.
"Things are stabilizing a little bit [there], but the companies are in dire straights," Day said. "So it's a good time pick them up. [Schneir] isn't out there looking for strong, healthy companies that don't need him," Day continued. "He's looking for the smaller companies that need the resources he can provide."
To accommodate the mergers, In Home Products has opened new facilities in Abilene (5,000 square feet) and Midland (1,500 square feet). Both facilities feature small show rooms and office space. Construction is also under way for a new 75,000-square-foot warehouse in Abilene.