Shield acquires 5,000 patients in Sterling deal

Friday, April 30, 2004

VALENCIA, Calif. - Shield Healthcare, one of the nation’s largest disposable medical supply providers, has taken strides recently to ensure continued growth in the West.
Shield Healthcare recently opened its 10th sales center in Inland Empire, Calif.

In March, the company acquired 5,000 new ostomy, urological, enteral and incontinence patients from Hayward, Calif.-based Sterling Medical Marketing.

Sterling transferred its home health supplies business in order to concentrate on the development of new healthcare markets, said Sterling President Jan Sterling in a press release. Sterling did not return phone calls for this article.

“Sterling has always been a great competitor,” said Jim Snell, Shield’s president and COO. “There were other company’s trying to buy the business, but Jan Sterling believes her customers will be served best by Shield.”

Specifics of the deal were not disclosed, but the acquisition turned on a higher multiple

than most for “strategic reasons,” said Todd Smith, Shield’s director of marketing. The patients, incorporated into Shield in March, are expected to make an immediate impact on 2004 earnings.

Shield estimates its growth rate to hover at 12% for the next three years through continued efforts in market development and penetration. In 2003, Shield began providing enteral nutrition; other avenues are being explored, said Smith.

To continue its market penetration strategy Shield also opened a new sales center in Inland Empire, California. The company now has 10 centers in four states - California, Colorado, Illinois and Washington - and has goals to open additional locations in Arizona, New Mexico, Texas and Utah.

“Geographic expansion is part of Shield’s corporate growth strategy,” said Smith. “Shield management is actively looking for new markets to enter.”