M&A for CRT: More complex than you think

‘There are options out there,' says Brad Smith
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Friday, March 9, 2018

TUCSON, Ariz. – When it comes to mergers and acquisitions in the complex rehab industry, it’s not just the two national providers that are making moves, says Brad Smith, managing director and partner at Vertess.

“There are others,” Smith said, “particularly a number of regional players, $10 million to $50 million, and smaller players, $10 million and under.”

Here’s what Smith had to say about why “there are options out there,” even in this considerably consolidated market.

HME News: Are there any complex rehab companies left to be bought?

Brad Smith: There are a number of DME companies out there, not necessarily all complex rehab, that are smaller and have two or three ATPs, and they have a really good book of business. They provide local, quality care. Those are the companies that are always assessing, should we stay in this and go up against the nationals, or should we look at teaming up with someone else?

HME: What are their options for teaming up with a company other than the nationals?

Smith: There are a dozen to two dozen regional players like Travis Medical and Healthline in Texas that are growing in between the spaces, and they’re in the game, ready to grow and opportunistic.

HME: What’s the allure of teaming up with a regional player?


Smith: For most of these smaller providers looking to exit, they want to know what’s going to happen to their employees. They want to make sure they’re taken care of. They want an environment that’s similar to the one they have.

HME: Are regional players often competing with the nationals to buy these smaller players?

Smith: A regional provider will make a competitive offer, right alongside a national, which is good for the seller. If there’s only one offer, there’s no competition, and there’s no incentive for a buyer to make a great offer.