Rumor mill: Rotech eyeing AHP
BRENTWOOD, Tenn. - The rumor mill is chewing up American Homepatient once again, aided by real concerns that the company may not be able to meet its debt obligation beyond Dec. 31, 2002.
This time, industry watchers speculate that Rotech, which just exited bankruptcy with a $75 million line of credit, might be interested in swinging a deal for AHP.
In theory, the deal makes sense.
By being acquired by Rotech, AHP could slip out from under a mountain of crushing debt and stagnant growth that, according to its independent auditors, could threaten the company's ability to continue. In its first quarter financials, AHP stated that the company's ability to make a Dec. 31, 2002, principal payment hinges on obtaining replacement financing, and there is no assurance that will happen.
For Rotech, acquiring AHP would balance out its national coverage without a lot of overlap.
"A lot of people are talking about it and the more they talk, the more sense it makes," said Schuyler Hoss, president of Northwest Healthcare Management. "It would be an elegant move, solving both parties' problems."
American HomePatient officials did not return calls. Rotech officials said they do not comment on industry speculation. HME