Apria acquires major Calif. HME

Monday, September 30, 2002

SACRAMENTO, Calif. - Apria scooped up one of northern California's largest independent providers last month when it acquired the John Davis Company for a reported $12 million.

While neither side would discuss the deal's terms, Apria paid $12 million and allowed John Davis to keep its accounts receivables and its supplies business, which is currently up for sale, say area sources.

CFO Byron Maynard said the specter of competitive bidding for Medicare had nothing to do with the company's decision to sell.

"We just got a good offer," said Maynard said. "The decision to sell wasn't because we had to. In business, [companies] are investments and are always for sale if it makes sense."

John Davis had revenues of $16 million, 40% of that coming from home respiratory therapy and the rest from rehab, DME and supplies. About 25% of its business came from Medicare and 25% from Medicaid. At one time, managed care comprised 30% of the company's business, but that component has shrunken over time to about 15%.

John Davis operated branches in Stockton, Sacramento, Grass Valley, Rohnert Park and Clear Lake. Apria will continue operating the Grass Valley, Sacramento and Stockton branches. It will merge the Rohnert Park and Clear Lake operations into its own facilities.

Maynard and President Tim Waits owned the company, with Waits holding the majority share.

"Every since I've been with this company, every month, it seems, we've had someone come across our doorstep wanting to buy it," said Maynard, who started with the company in 1984. "But everybody wanted to steal it from us, either give us some crazy finance deal where they wanted us to finance the deal or some crazy stock deal. Or they'd want only part of the business, Or they didn't want all the real estate we had leased. There were all kinds of different issues." HME