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OEP buys American Medical Technologies, leaning in on wound care opportunity

The PE firm sees robust growth potential for AMT, fueled by the country's diabetes problem, favorable reimbursement dynamics and increasing demand across post-acute care settings.

One Equity Partners has acquired American Medical Technologies in what marks the mid-market shop’s latest bet across the continuum of post-acute healthcare. 

“We’ve been calling on AMT for about a year and a half,” said Greg Belinfanti, senior managing director at OEP. “As we looked at the dynamics in nursing homes, we thought, this was pretty interesting.”

AMT, headquartered in Irvine, California, provides advanced wound care supplies and services to predominantly skilled nursing facilities. It manages the treatment of more than 250,000 wounds annually. A smaller piece of the business offers ostomy, urology and tracheostomy supplies and services. 

Led by OEP’s Belinfanti and Managing Director Brad Coppens, the New York PE firm bought out AMT’s existing ownership, while the company’s management team will remain on board. The acquisition, sourced on a proprietary basis, was seller-financed, the firm told PE Hub

Belinfanti declined to comment on the deal’s financial terms, but said in the long-term care setting, AMT on a revenue basis is about 3x the size of its nearest competitor. Meanwhile, the wound care market is growing at a 4 to 6 percent rate. 

“Only about 25 percent of the market is outsourced, so we think there is a lot of white space,” Belinfanti said. “We are a cost saver for the SNFs [skilled nursing facilities].” 

The deal represents a continuation of OEP’s thematic focus across the post-acute care spectrum. Existing investments include home care provider Simplura, and further down the continuum, Ernest Health, which provides care within inpatient rehabilitation facilities — before people are able to be in the home. 

Most recently, OEP in May struck a $190 million PIPE investment in AdaptHealth, a durable-medical-equipment (DME) provider to individuals in the home. The capital injection helped facilitate Adapt’s simultaneous $425 million acquisition of Solara, a provider of continuous glucose monitors for diabetes management, from Linden Capital. 

“As we continued to look at the post-acute sector, DME really stood out as a place where there was going to be a lot of opportunity,” Belinfanti said. “We’ve been following this theme for a while now … and thought, where else can we play in DME?” 

The wound care segment in which AMT plays can be viewed as a derivative around both DME and diabetes, he said: “If you think about diabetes, it’s a rapidly expanding market unfortunately, and 20 percent or more [diabetics] will experience a chronic wound.”

At the same time, recent changes in reimbursement policies are set to favor AMT, Belinfanti said. Further compelling, wound care and ostomy have historically been carved out of competitive bidding, lending to greater visibility around potential reimbursement pressures.

The competitive bidding program was designed to award contracts to DME suppliers that offer the best prices and meet compliance standards, which means some categories have seen severe discounts in pricing. 

“There’s no real standard treatment for a wound; these wound care products are very different than diabetic testing strips or a wheelchair,” Belinfanti explained.

In some ways, investing in a company serving skilled nursing facilities “cuts against the grain”, Belinfanti admitted, having focused over the last four-plus years on growing Simplura — a company riding the trend of seniors’ increasing preference to age in their homes. 

But, Belinfanti said, nursing homes are here to stay even amid that shift. And, if you look at the nature of the nursing home patient, it’s more of a Medicaid, longer-stay patient, he said, which ultimately creates demand for the complex care AMT offers. 

“Nursing homes are seeing sicker patients and those patients are seeing chronic wounds,” he said. 

That said, OEP plans to fuel AMT’s growth into settings outside of the SNF, like the home.

AMT will evaluate logical tuck-in acquisitions that bring geographic expansion, add new care settings or capabilities. There’s also an opportunity to expand within different segments of the SNF market, as some wound care providers outsource to the mom-and-pops, while others are predominately partnering with the larger chains, Belinfanti said.

Action Item: Read more on OEP’s recent PIPE deal in AdaptHealth