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Quality Biomedical doubles down on logistics

Quality Biomedical doubles down on logistics

BOULDER, Colo. - Quality Biomedical needed an outside investor to execute an aggressive growth plan that includes opening seven more service centers in the next 12-18 months, says CEO PK Bala.

The company, which provides integrated logistics, warehousing, service/repair, documentation management and other related services for respiratory equipment, has secured a $5 million straight equity investment from Aeonic Partners, a New York-based private equity firm.

“We needed a significant investment if we wanted to do something that big that quickly,” Bala said.

Aeonic Partners, which says it employs a “buy-and-hold strategy,” now holds a minority position in the company.

Quality Biomedical has service centers in five states right now, but to provide “truly national coverage” and to expand beyond DME into EMS and skilled-nursing markets, the company needs to expand, Bala says.

“With a total of 12 service centers, and the logistics capability of stretching out 250 miles from each center and using a combination of warehouse solutions in between, we'll be able to completely build out a national network,” he said.

To increase its coverage, Quality Biomedical also plans to officially launch an affiliate program in 2020. The program allows the company to leverage competitors in regions where it has gaps in coverage.

“They operate like us, complying with the standards we give them,” Bala said. “We launched it on a low-key basis and found it to be successful.”

Quality Biomedical also plans to use the investment to “reinforce” Q-Connect, a cloud-based technology platform that allows providers to view the entire lifecycle of their equipment, with additional features and security enhancements.

“All of (what we offer) originates with Q-Connect,” said Jim Worrell, chief commercial officer. “We have thousands and thousands of branches that are using it to manage their equipment.”

Quality Medical has grown about 300% since it entered the industry four years ago and, now, with a PE firm involved, it plans to quadruple its revenues in the next five years, Bala says.

“Like any other investor, they're looking for a decent rate of return,” he said, “and that's what we believe we can deliver.”


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