Companies With Home Healthcare Products Might Be Breathing New Life Into Respiratory Care Market

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The population of the United States is aging.

Approximately 10,000 Americans turn 65 every day, and the number of seniors with respiratory disease is only expected to increase in the coming years.

That reality alone could point to organic growth opportunities for medical device providers in the field.

Kentucky-based Quipt Home Medical Corp. QIPT, a provider of home healthcare devices such as oxygen therapies, positive air pressure devices (PAP) and home ventilator systems is one company that says the industry is experiencing new growth, and reports growing through acquisitions. 

While Quipt anticipates 5% to 6% organic growth annually resulting from an aging population, it’s been aggressive on acquisitions recently, completing 11 in the past four years.

Picking Up Momentum?

Three of those acquisitions closed in the three months ended Dec. 31. They were in Mississippi, Illinois and southeastern states and added about 8,000 new patients.

That momentum might be carrying forward into 2022 with Quipt acquiring Indiana-based At Home Health Equipment Inc. Jan. 1 and adding over 15,000 active patients in the process.

The company operates out of 76 locations in 15 states concentrated in the Midwest, Southeast and East Coast regions. In fiscal 2021, it completed over 350,000 deliveries to more than 170,000 active patients, with over 19,000 referring physicians.

With about $20 million of cash on hand and a $20 million line of credit, Quipt says it wants to build on its recent acquisitions and expand geographically as well as vertically.

“With the unparalleled scalable platform we have, driven by the patient-centric ecosystem we have created, our strategy is allowing us to grow market share in new and existing markets and provides us the ability to make sizeable acquisitions and integrate with great efficiency drawing meaningful synergies,” CEO and Chairman Greg Crawford said in February on the release of quarterly results.

The company reports that it operates a three-tier acquisition strategy involving smaller companies with less than $5 million in revenue and existing insurance contracts, larger respiratory-focused entities with revenue up to $20 million and even larger companies with an active patient base and strong geographical presence.

Quipt also says it relies heavily on a consistent post-acquisition strategy involving back-office integration and a strong information technology (IT) structure designed to improve profitability in an industry where technology adoption can be slow at times. 

In a heavily fragmented durable medical equipment (DME) sector, some of the larger players include Linde plc LIN and Owens & Minor Inc. OMI. The DME sector is valued at about $56.1 billion with $18.9 billion of that respiratory care.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

Picture credit: Silvan Arnet on Unsplash