Hymes peels back supplies market

Friday, January 5, 2018

Eric Hymes, a new managing director at M&A firm Vertess, got his start in the supplies market, with diabetes, urologicals and wound care supplies his “first and second languages.” Here’s what Hymes, whose previous experience includes stints at CCS Medical and Coloplast, had to say about why the supplies market is hot and getting hotter, and why the recent tax overhaul might spur M&A activity.

HME News: What kind of activity are we seeing in the supplies market right now?

Eric Hymes: We continue to see this verticalization of the supply chain. You have distributors that are being bought by major manufacturers, and you have both that are consuming the DME provider, small and large alike.

HME: What’s attractive about this market?

Hymes: We see Medicare rolls continuing to expand daily. There’s a natural growth factor there, so anybody in the supplies and the disposables space will see those needs grow. We’re also going to see growth due to the trend of pushing care more into the home—that’s nothing new, but there has been more recent pressures in the past 10 years.

HME: Will the tax overhaul have an impact on M&A activity?

Hymes: Without revealing my political colors, they slashed the levy that companies are paying on repatriated earnings, so there’s going to be a movement of cash back to the U.S. I think it’s going to trigger a buying spree and we are going to see that in the healthcare segment, in general, and disposables, specifically.

HME: Who’s doing the buying?

Hymes: They are going to be manufacturers, like GE Healthcare or foreign companies. I am still surprised to this day the Chinese haven’t invested a lot of money into our market for health care.

HME: How do you see the diabetes supply market changing shape due to the national mail-order program?

Hymes: One factor that concerns me is the rates keep going down and that creates an effect where we see a lot of lower quality foreign made product making its way into the supply chain. I think if someone can become the Amazon of diabetes supplies and give that level of service, they will revolutionize the way we see direct-to-patient home delivery.