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Home Health & Hospice Week

Mergers & Acquisitions:

Are You an Appealing Acquisition Target?

Published on Thu Oct 16, 2003

The home respiratory market is ripe for consolidation, and you could be the one to benefit from the situation.

Check out this list of what buyers are looking for in an attractive acquisition to see if you measure up:

  • A high ratio of respiratory business. Even respiratory king Lincare does 10 percent non-respiratory business, but the higher the ratio the better.

  • Appreciable market size. Revenues in the $1 million to $2 million range are desirable, says Dexter Braff of The Braff Group.

  • Good stats, including a favorable profit margin and days sales' outstanding, says Jack Eskenazi of American HealthCare Capital.

  • Efficiency of operations.

  • Urban status. Despite the news that competitive bidding may hit only urban markets, buyers continue to shy away from rural acquisitions for fear that low density means low profits, Braff reports.

  • Referrals. In selected markets where there is one major referral source, buying a company that captures those referrals is prized, notes Kevin O'Donnell of business consulting firm Healthcare Resources of America.

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