HME News

JAN 2018

HME News is the monthly business newspaper for home medical equipment providers. This controlled circulation publication reaches 17,100 home medical equipment services providers, including traditional HME dealers & suppliers, hospital- and pharmacy-o

Issue link:

Contents of this Issue


Page 21 of 24

Vendors hme news / january 2019 / 21 NAT ' L R A m P c o n t i n u e d f r o m p r e v i o u s pa g e INOGEN c o n t i n u e d f r o m p r e v i o u s pa g e b OTANICO c o n t i n u e d f r o m p r e v i o u s pa g e balanced approach to look at some of the other parameters and not just another smaller and lighter POC." Inogen also plans to launch Inogen Connect by the end of the year, joining the ranks of other manufacturers that offer POCs with connected capabilities. "We believe providers will find fea- tures such as remote troubleshooting, equipment health checks and a location tracker will drive operational efficiencies when transitioning away from the delivery model," Wilkinson said. Additionally, Inogen plans to launch Inogen Capital, a program that will help providers secure financing through a third party to convert their businesses to a non- delivery POC model. "It's something that our HME customers have been asking for for a long time and, frankly, something that our competition has used as a selling tool against us for many years," said Ali Bauerlein, co-found- er and CFO. hme s AN DIEGO – ResMed has entered into a defini- tive agreement to buy Propeller Health, a com- pany that provides connected health solutions for people living with COPD and asthma, for $225 million. The Madison, Wis.-based Propeller makes small sensors that easily attach to inhalers and pair with a mobile app to automatically track medication use, and provide feedback and insights. The company's ability to sup- port people in stage II and III severity levels of COPD are complementary to ResMed's own suite of cloud-connected vents for those with stage III and IV COPD and its new portable oxygen concentrator. "Acquiring Propeller is a significant step for ResMed toward becoming the global leader in digital health for COPD," said CEO Mick Farrell. "By working with Propeller's existing partners to offer digital solutions for respira- tory care pharmaceuticals and building on our proven ability to support digital solutions at scale, we can positively impact the lives of even more of the 380 million people worldwide who are living with this debilitating chronic disease." Hot month in M&A: ResMed (2x), Pride Mobility, DJO Under the terms of the agreement, ResMed plans to buy Propeller for $225 million, pri- marily using its credit facility. The companies expect to close the deal before the end of the third quarter of ResMed's fiscal year 2019 (March 30). Propeller, which also has an office in San Francisco, will continue to operate as a stand- alone business within ResMed's Respiratory Care portfolio. David Van Sickle, co-founder and CEO, will continue in his role, reporting to Richie McHale, president of the portfolio. r es m ed expands software portfol I o s AN DIEGO – ResMed has acquired MatrixCare, a provider of long-term, post-acute care soft- ware, for $750 million. MatrixCare serves more than 15,000 providers across skilled nursing, life plan communities, senior living and private duty. "The acquisition of Matrix- Care is an excellent addition to the out-of- hospital software portfolio that we can offer our healthcare provider customers," Farrell said. ResMed already owns Brightree and HEALTHCAREfirst, which serve HME, home health and hospice providers. For calendar year 2018, MatrixCare pro forma net revenue is estimated to be about $122 million, with a pro forma EBITDA of about $30 million, making the deal's price tag a valuation mul- tiple of 25 times. ResMed will fund the deal, which is expected to close by the end of the second quarter of its fiscal year 2019, primar- ily with its credit facility. p r I de ex I ts l I ft, ramp b I z EXETER, Pa. – Pride Mobility Products has sold its lifts and ramps division to Harmar Mobil- ity. The move allows Pride to focus on its efforts developing consumer-driven mobil- ity products for its scooter, power chair and lift chair product lines. "Our business is about consumers, and this change allows us to give consumers more of what they desire in our mobility products," said Scott Meuser, chair- man and CEO. "We know that Harmar will continue to offer the same quality and support for our lifts and ramps, providing a seamless transition." Harmar says acquiring Pride's lift and ramp business combines "two success- ful vehicle-lift product lines" and solidifies its position as a "market leader." "The acquisi- tion is consistent with our strategy to build on our leadership position in vehicle lifts," said Steve Dawson, CEO of Harmar Mobility. djo sells to pe f I rm ANNAPOLI s , m d. – Colfax Corp. has entered into a definitive agreement to buy DJO Global from an investment group led by private equity firm Blackstone for $3.15 billion in cash. Colfax provides air and gas handling and fabrication technology products and services to customers around the world, pri- marily under the Howden and ESAB brands. "The acquisition of DJO is a compelling next step in the strategic evolutions of Colfax that creates a new growth platform in the high-margin orthopedic solutions market," said Matt Trerotola, president and CEO of Colfax. "We see significant opportunities to apply our proven Colfax Business System across DJO to create a continuous improve- ment culture, further improve productivity and margins, and accelerate innovation and new product development." Upon closing, DJO Global will operate as a new segment within Colfax and be led by Brady Shirley, DJO president and CEO, who will report directly to Trerotola. hme this space," Geffert said. "The patients they're caring for often have chronic conditions and they're looking for alternative medicines. These markets represent a growing holistic approach that includes oils, creams, patches." Both Prebula and Geffert noted there's still a stigma around the cannabis and hemp mar- kets, but Prebula was blown away by the "pro- fessionalism" at the recent trade show, MJBiz Con, Nov. 14-16 in Las Vegas. "There were doctors, lawyers, CPAs—a lot of people in suits," she said. Having a buying group like botaniCo that's specifically for the cannabis and hemp mar- kets is another step toward increasing that professionalism. "We're part of the effort to legitimize this industry," Prebula said. "It really shouldn't be treated the way it's treated." hme ramps became the Victory line; its com- mercial ramps became the Latitude line; its folding ramps became the Freedom line; and its miscellaneous products became the Celebration line. " W e w a n t e d to carry a brand through all of our products," Miller said. Going forward, National Ramp will focus on creating new lines made of new materials— "What's next, after aluminum?"—and helping its network of about 250 dealers increase their sales. "We pride ourselves on actually know- ing how to sell ramps," Miller said. "Our managing director (Garth Walker) came here from being a dealer himself. He shares his wealth of knowledge with our network." hme DEAN C h ILDER s c o n t i n u e d f r o m p r e v i o u s pa g e expectations and make Invacare a company that is easy to do business with," she said. "These actions have led to adjustments in some areas of the business and investing in others to make sure they align with our long-term strategy." After incurring restruc- turing charges of about $1.2 million in the fourth quarter of this year, Inva- care expects to generate about $5 million in annu- alized pre-tax savings from its most recent layoffs. Previously, Invacare laid off about 110 employees in late 2017, generating $8.5 mil- lion in annualized pre-tax savings. It has had a string of layoffs since 2014. hme Dean Childers million for the third quarter of 2018 com- pared to the same period last year. Net sales for the NA HME division decreased 7.3% to $73.6 million. A big reason for those decreases, particu- larly for respiratory products: Providers have held off on equipment purchases until they see what the market is like on Jan. 1, when any Medicare-enrolled provider will be able to provide DME during a two-year gap period in the bid program. "It's reasonable to expect incumbent pro- viders are hesitating before they make big equipment purchases coming into next year…and the new entrants are probably going to see what it takes to conduct business in areas where they have not been conduct- ing business," Monaghan said. "It's going to compress respiratory sales temporarily until the new dynamics work out and we get a new balance of who's providing equipment. That could take some portion of the first quarter or beyond." Also not helping with sales of respiratory products is Invacare's decision to lay off about 50 associates and to raise prices, in an attempt to offset the higher costs from tariffs. "Despite the strong clinical, business and services values we offer, these higher prices may make our products less competitive," Monaghan said. By most accounts it was a tough quarter among a string of tough quarters for Invacare, which is working to rebound from a years- long consent decree from the U.S. Food and Drug Administration to hit $100 million in EBITDA by late 2020. "Had any one of these (headwinds) occurred in the quarter, it would have been more manageable," Monaghan said. "The fact that all of these are occurring at the same time has led to the challenging results we see." The next 60 days will be crucial for Inva- care. If a 10% tariff becomes a 25% tariff in January, as planned, the company may have to revise its strategy for meeting the $100 mil- lion goal. "It's just happening too fast to tell people," Monaghan said. "Our internal confidence remains that there are enough things that we can do in our business to effect the same out- come." hme KENNE s AW, Ga. – Philips Respironics is taking steps to consolidate and transfer manufacturing, R&D operations and related business functions from its facility in Kennesaw, Ga. The process will continue through the end of 2019, the company says. "During this period, manufacturing operations in Kennesaw, which includes home oxygen and a limited number of other products, will be transitioned to a third-party manufacturer and existing Philips facilities in western Pennsylvania," the company stated. The consolidation will affect about 400 positions in Kennesaw, with plans to transfer 160 positions to facilities in Pennsylvania, the company says. The decision to consolidate is driven by "business considerations" and is in line with an overall strategy to optimize manufacturing locations for scale and efficiency, as well as support resource and best practice sharing, the company says. "In addition, it will increase focus on enhancing Philips portable oxygen offer- ings," the company stated. Philips announced earlier this year that it would allow cash customers to buy its POCs directly from the company. It also announced earlier this year that it would discontinue its UltraFill Home Oxygen System by the end of this year. hme Philips consolidates manufacturing I N v ACARE c o n t i n u e d f r o m pa g e 1

Articles in this issue

Links on this page

Archives of this issue

view archives of HME News - JAN 2018