VMI’s Eaton analyzes consolidating accessibility market

‘This is more about economies of scale’
Friday, September 4, 2015

PHOENIX – There’s at least one person who’s not worried about consolidation in the wheelchair accessible van market: Doug Eaton.

Eaton, president and CEO of Vantage Mobility International, which manufactures and distributes wheelchair accessible vehicles, says having fewer providers allows his company to concentrate its resources and grow through economies of scale.

It helps that Eaton approves of the latest consolidator in the market: MobilityWorks, which recently announced a merger agreement with Hasco Medical.

“MobilityWorks is a longtime high performer for VMI,” he said. “They consistently deliver on their promises, take care of their customers, and they make investments in their business.”

The MobilityWorks-Hasco deal signifies the growing interest in the accessible van market, Eaton says.

“In the last two years, there’s been a handful of private equity-backed deals and this to me highlights that this is a desirable industry to invest in for professional capital,” he said.

The terms of the deal—MobilityWorks purchased Hasco’s common stock for $23.5 million—is also a boon for dealers seeking investments, Eaton says.

“That was the highest price ever paid for a retail chain,” he said. “They now have a significant, bona fide comparable when they’re valuing their business for investment or recapitalization. That’s significantly higher than the previous comparables.” 

While the number of providers may be shrinking, Eaton says the market is growing at 6% annual. 

“There are less ownership groups, but the points of distribution are growing,” he said. “This is more about economies of scale than it is about distressed assets and dwindling resources. It’s all about growth.”