O2 Science sales rep picks a winner in Las Vegas

KENNESAW, Ga. - A 24-year industry veteran who has launched an HME company, delivered concentrators and beds, monitored oxygen saturation levels as an RT and finally found her calling as a billing guru and head of Jane's Billing & Consultation Services (JB&CS) is working on a roll-up and an IPO. Your typical IPO perhaps, but not your typical roll-up. Jane Bunch While Apria and Lincare come calling with wads of cash, the principals of Jane Bunch's DME holding company, DMEs of America, plan to woo Moms & Pops with a combination of cash and a stake in the new company. Indeed, Moms or Pops who are looking to ‘sell and get out' need not apply. “My whole concept is that I don't want the owners and employees to leave,” said Bunch. “It is my wish, and it is mandatory, that the owners stay. They're the ones who built the rapport with the referral sources and who the patients know.” The HME industry is fertile terrain for consolidators. Some, like Todd Christopher's Home Care Supply and Bob Cucuel's American Homecare Supply (now part of Air Products), matured and bloomed, while others, like HomeTech Medical Services in California and Home Life Medical in Massachusetts dive-bombed into bankruptcy in 1999 and 2001 respectively. Home Life Medical foundered on the shoals of a botched software integration and evaporated cash flow. Bunch, who plans to convert acquired companies to her software system, said she would not have embarked on a roll-up scheme without the “solid base for billing” that she's developed over the past 24 years. “Most of the time you hear about these failures, it all goes back to billing and collections,” she said. “If you don't have a billing platform in place, you can't make it work.” While JB&CS will handle billing, training and consulting as a division of DMEs of America, Bunch and her partners are launching a pharmacy, My Meds Today, to manage DME medications. A third operating unit, PharmEquip International, will manage purchasing and inventory. JB&CS, with 52 employees, now handles billing for 150 DME clients that range in size from start-ups to one company generating $10 million in revenue annually. Bunch said she hopes to fill the ranks of DMEs of America with JB&C clients first. She also said she would not acquire any company that competes in the territory of client that does not wish to sell. To fund the fledgling roll-up, Bunch has partnered with a boutique investment firm in Miami, BK Generalli, led by Orlando Birbragher and Marshall Kanner. “We see a real need for sophisticated management as smaller DMEs face intense regulatory issues and capital issues,” said Kanner. “Some independents will never be solvent because the underlying management is never there. Sometimes you have an excellent management team, but they are undercapitalized. That's where a company like ours comes in.” Kanner and Birbragher plan to do an IPO after they've acquired their fifth DME company. Bunch expects to acquire 25 DMEs within 12-14 months. Kanner declined to reveal the depth of funding available to DMEs of America but said it was sufficient. DMEs of America expects to announce its first acquisition by the end of next month.