Reporter's notebook: Companies buy and sell in 2015

Roll-up companies make headline
Friday, January 22, 2016

Looking back at provider activity in 2015, one thought comes to mind: It was a year of consolidation.

From national providers merging to outside companies looking to get into the HME space, the deals were both large and small in 2015.

One of the most read stories of the year, (“Company seeks to offer ‘exit strategy’”) highlighted a new roll-up company, FullCircle Registry, which seeks to acquire small rural companies, starting in Louisiana. We’ll posit here that the continued roll out of competitive bidding, as well as the crushing onslaught of audits, has many providers seeking a savior.

The other roll-up, the Canadian company Patient Home Monitoring, also has a specific focus, this one on respiratory companies (“‘Aggressive’ PHM sees opportunity in HME”). 

Both companies favor a mix of cash and stock options, rather than a straight acquisition, to which M&A analysts say, seller beware.

The year also saw an increase in buying activity by larger regional and national players, including Rotech Healthcare. Rotech in 2015 made several acquisitions throughout the year as it sought to expand its footprint.

Also making strategic buys was Lincare (“Lincare joins Rotech, AeroCare on M&A trail”), which ended the year with a bang when it acquired American HomePatient (“Lincare bulks up before bid expansion”), a deal that had been rumored for months.

And finally, consolidation is not specific to the HME industry—it’s happening across the healthcare continuum. News that insurance giants Aetna and Anthem planned to acquired Cigna and Humana, respectively, sent ripples of fear throughout the provider community (“Insurance giants merge: Providers brace for lower rates, increased competition”).