Tag: Mergers & acquisitions

Q. Is pursuing an M&A transaction process the right decision for my organization?  A. Typical motivations to begin an M&A process are to generate owner liquidity, mitigate personal financial risk, raise capital to fund growth initiatives (e.g., acquisitions, new service offerings, etc.), gain strategic resources and infrastructure capabilities, or take a step back from the business to retire or explore other ventures.   M&A processes can also create opportunities to partner with like-minded...

Q. How will rising interest rates affect the M&A market for HME businesses?  A. As the Federal Reserve has raised interest rates to help combat inflation, private equity sponsors who utilize debt to finance a portion of their acquisitions have been faced with higher borrowing costs. Debt providers typically price loans off a certain benchmark rate (e.g., LIBOR, federal funds rate, etc.), and as those benchmark rates have risen, the cost of debt to finance acquisitions has increased alongside...

Q. How has the M&A environment for HME providers shifted over time?   A. Following the introduction of competitive bidding in the early 2010s, M&A activity in the HME sector grounded to a halt, as reimbursement was cut drastically. However, as the marginal impact of each subsequent round of competitive bidding lessened and the reimbursement environment stabilized, investors demonstrated a renewed interest in HME providers, driven by market tailwinds that have positioned the sector for growth....

MERION STATION, Pa. – The owner of OxygenWorks, Philomena Baylor, has divested her business to AdaptHealth.  OxygenWorks, based here, is a privately owned, multi-generational company providing a broad spectrum of respiratory equipment and supplies to patients in Pennsylvania, Delaware and New Jersey, according to a press release from the company’s adviser, Central HealthCare Group.  Central HealthCare Group is a Philadelphia-based...

Q. If I know the most likely buyers for my business, do I need to hire an M&A advisor?A. Of course you don't need to, but here are five key reasons why you would want to.Advisors know the decision makersYou may know the company, but do you know the M&A folks within those companies and what information they like to see? An advisor knows the strategic importance of your business and how to present it to each buyer, which can be very different. Advisors create a processKnowing other potential buyers...

Q. Would a change to capital gains tax impact the sale of my business?A. Yes, potentially a lot.You have a solid business you've built for years, maybe decades. You've thought about a sale in the near-ish future. Considering the implications of possible tax increases on net proceeds might move up your timetable.Regardless of who wins in November, I think we can agree the need to pay for 2020 Covid spending and other government overruns will put tax increases on the table, including long term capital...

YARMOUTH, Maine - A flurry of M&A deals closed in the fourth quarter of 2018, making it one of the busiest quarters in the past several years, say analysts.A big reason for that: CMS's decision to pause competitive bidding for two years, while it makes substantive changes to the program.“Volume is up, inquiries are up,” said Don Davis, president of Duckridge Advisors. “There's a lull from Medicare (in competitive bidding) and people are thinking more about their businesses. I suspect...

YARMOUTH, Maine - Expect to see large regional HME players get bigger in the year ahead as they look to increase their market share, say M&A analysts.“These regionals are really looking to grow their territory,” said Brad Smith, managing director/partner at Vertess. “I think 2018 is going to be a huge year.”And that's building on a strong 2017. In the third quarter of last year, 18 transactions were completed in the HME sector, the highest since 2014, according to The Braff...

YARMOUTH, Maine - The pace of acquisitions slowed down a bit in 2016, but overall it was a decent year for buyers, say analysts.“The big deals have stalled out a bit, but you have a lot of people that are shopping and acquiring the small patient add-on deals,” said Brad Smith, managing partner at Vertess, a Tucson, Ariz.-based M&A advisory firm. “If you have $10 million to spend, you could get one really nice company or you could buy a whole ton of patient lists, which have more...