CGMs spur ‘broader push’ from buyers

By Theresa Flaherty, Managing Editor
Updated 4:39 PM CST, Fri January 17, 2025
YARMOUTH, Maine – A pair of deals in the fourth quarter of 2024 highlights the attraction of the patient-direct market for continuous glucose monitors, say M&A analysts.
In December, Cardinal Health announced it plans to spend $1.1 billion to buy Carlsbad, Calif.-based Advanced Diabetes Supply, a national provider that serves about 500,000 diabetes patients annually, and in November, Henry Schein said it had signed an agreement to buy Tampa, Fla.-based Acentus, a national provider of CGMs with $35 million in annual revenue.
“These two latest deals are representative of a broader push from larger strategic groups into the patient-direct market, which deviates from their traditional B2B/wholesale focus,” said Kevin Palamara, managing director for Provident Healthcare Partners. “Both private equity and strategic buyers are drawn toward the growth tailwinds in the CGM market.”
Those tailwinds include a growing patient population, highly recurring revenue and clinical and patient preference. CGMs, analysts say, are widely credited with giving a shot in the arm to the diabetes supply space, enticing many new entrants to the market over the past several years.
“New customer acquisition is critical given the meaningful lifetime value and revenue opportunity associated with each incremental patient,” said Brendan Schroeder, senior associate for Provident Healthcare Partners. “Groups that have found ways to excel in service quality (specifically regarding new order turnaround time), patient engagement, diversity of payer relationships, etc., have found success and are well-positioned to build upon that.”
Analysts expect to see further consolidation in the market – and diabetes supply patients often have other HME needs that offer providers additional opportunities for growth, says Jonathan Sadock, CEO and managing partner at Paragon Ventures.
“In addition to diabetic supply, we are seeing demand for other areas of HME, like lymphedema, incontinence, urology, etc., where reimbursement changes and legislative and regulatory (changes) create significant growth opportunities within a given patient population,” he said. “Many of these PE firms are strategically focused on scaling their business along novel horizontal pathways, including direct-to-patient opportunities as home health care continues to expand.”
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