Paragon Ventures enjoys front seat to industry change

NEWTOWN, Pa. – Even after three decades in mergers and acquisitions, Jonathan Sadock and Marc Rose of Paragon Ventures still get excited to see how HME companies are evolving. 

“We have the benefit of having so much experience with seeing so many companies and how they – and the HME sector – have evolved to what it is today,” said Sadock, CEO and managing partner at Paragon Ventures. 

Paragon, which launched in 1994, has successfully completed more than 350 transactions across the health care continuum.  

Sadock and Marc Rose, founder, president and managing partner, spoke with HME News recently about how, even after 30 years of change, health care remains a local business, and why there’s a reward in lighting fires in young minds. 

HME News: What keeps you going each day in the HME industry? 

Jonathan Sadock: What’s been so motivating to me personally and to our business are the people that run these companies. They have been in it for a long period of time and have seen incredible challenges to their business – reimbursement cuts, regulatory and compliance issues, and, most recently the impact of the (Change Healthcare cyberattack) – and through it all they find a way to start the patient on service and stay in business.  

HME: One consistent trend we’ve seen over the years is consolidation. 

Marc Rose: I've been through three or four cycles in the last 30 years in this industry, beginning way back with everything leading up to competitive bidding. The nationals gobble up a bunch of mom-and-pop companies and then they sort of go into some kind of metamorphosis where all the original owners leave and it becomes a more impersonal business, which continuously opens up opportunities for both the former owners and a lot of other younger entrepreneurs.  

HME: So, there’s still room for the so-called mom-and-pop providers?  

Rose: They keep popping up after all these consolidations through the years to open up in their localities because it is a local business, and it always will be. If you or your parents are sick and you don’t know much about HME, you’re going to talk to people and they’re going to recommend someone that has a showroom on Main Street. 

HME: Do you use your experience to educate the next generation of would-be HME owners? 

Sadock: Absolutely. We consult to the Harvard Business School for a program called Entrepreneurship Through Acquisition. We provide them with materials so that they can learn about what it takes to evaluate owning a business like this. On many occasions, I've sent them redacted presentations of the business for sale so that they could understand this sector and it's very interesting how many of the students gravitate toward these kinds of businesses and then end up acquiring a business. You get to light the fire in their mind.