AdaptHealth takes long view of CPAP market

PLYMOUTH MEETING, Pa. – Acquisitions will continue to be a big part of AdaptHealth’s strategy, but how much will depend on how the market for CPAP devices unfolds throughout 2022, company execs said on a recent earnings call. 

“Depending on supply and the availability of product in the back half of the year, we could dial up or dial down our ability to do integrations and acquisitions,” said Josh Parnes, president.  

In 2021, AdaptHealth closed on 23 acquisitions, including Toms River, N.J.-based Community Surgical Supply on Dec. 31. So far in 2022, the company has made six buys, including Enfield, N.H.-based Keene Medical Products in April. 

The acquisitions the company does make this year will be more selective, says Parnes. While it will continue to be opportunistic, it also has its eyes on a “reset” of the market. 

“We don’t know where valuations will shake out,” he said. “There’s still a decent amount of product on the market for us to acquire and companies looking for us to acquire. But there’s also an in-between state where valuations were very high going into this year and really there’s somewhat of a reset in terms of where the market.” 

While AdaptHealth has seen an improvement in its ability to perform new set ups for CPAP devices, putting the company at or near 2021 levels, it still has seen its patient backlog grow, something that will likely continue until supply pressures are reduced, says CEO Steve Griggs. 

“We continue to believe it is unlikely we will see new units for sale from Respironics before 2023; however, we hope other suppliers will be able to address their supply chain issues this year,” he said. 

Once the CPAP market is back to running on all cylinders, AdaptHealth is positioned to take an even larger share of the market, says Griggs. 

“It’s a once-in-a-lifetime opportunity,” he said. “We are a leader in CPAP and now we have an opportunity to increase our market share significantly coming out of this.”