Supplies companies ‘drive buzz’ in M&A

YARMOUTH, Maine – Demand for providers with a focus on supplies is strong, particularly when it comes to manufacturers looking for a platform in the urologicals space, say analysts. 

“Over the last several years, I must have talked to between five and 10 manufacturers of urologicals that are starting to or looking to expand into actual patient distribution,” said Rick Glass, president of Steven Richards & Associates. “They’re looking for a platform or to add on to an existing platform.” 

Fortunately for those manufacturers and other buyers, supplies companies are typically well-run, says Glass. 

“There hasn’t been a lot of clean up, and that’s what leads to outstanding valuations,” he said. “The manufacturers, in addition to picking up patients, they are looking to add great management teams.” 

For sellers, there are ways to establish themselves as an attractive purchase, says marketing consultant Lisa Wells, who advises companies on marketing tactics and “window dressing” as they prepare to sell. 

“In terms of outward facing communications, we see players in the space driving buzz for their brand to either be acquired, to grow sales and to recruit talent,” she said. 

Supplies companies can make themselves more attractive by building a customer base with a good mix of long-term users, Wells says. Patients with health problems related to prostate cancer or recovering from surgery are shorter-term customers compared to patients with spinal cord injuries, for example. 

“Organizations are getting smarter about looking at that,” she said. “As people step into the space to expand their portfolio, it’s wise to look at organizations that have more stable patients.”