PE-backed AeroCare, oxygen-therapy DME, taps adviser for sale

  • Investors: Peloton Equity, SV Health Investors
  • DME company explored public debut in ’14
  • Rival QMES remains for sale via JPM-run process

AeroCare, a private equity-backed provider of home respiratory therapy products and services, is gearing up for a sales process, according to three sources.

Triple Tree has been engaged to advise the Orlando, Florida, durable medical equipment company, two of the sources said. A formal sales process is poised to launch in 2019, they said.

AeroCare is backed by Peloton Equity, the healthcare-focused growth-equity spinoff from Ferrer Freeman & Co, and SV Health Investors, formerly SV Life Sciences.

The company’s Ebitda sits at about $100 million, two of the sources said. One of the sources and a third cautioned that buyers may value the company based upon Ebitda minus capex, a notably smaller figure.

The expected auction for AeroCare comes as Quadrant Management seeks a buyer for AeroCare’s direct competitor, QMES LLC. East Coast-focused QMES is being advised by JP Morgan Securities, Buyouts reported.

One source said sponsors interested in the segment have discussed the possibility of coupling the two assets together in a transaction. Such a deal, the source said, likely would prove challenging.

A potential combination involving another competitor, Apria Healthcare Group — which Blackstone Group has owned for more than a decade — could also be explored, this person said.

AeroCare, founded in 2002 by CEO Steve Griggs, delivers medical equipment products to the homes of patients typically diagnosed with diseases that make breathing difficult.

The company provides CPAP and BiPAP machines to treat sleep apnea, nebulizer medications to treat chronic obstructive pulmonary disease, known as COPD, as well as oxygen concentrators to help address insufficient oxygen levels.

About four years ago AeroCare came close to joining the public markets through an all-stock merger with MergeWorthRx, a special purpose acquisition company.

The deal, which would have left AeroCare’s then-shareholders — Ferrer, Freeman and MTS Health Partners — with a 53 percent stake in the combined company, was terminated in December 2014.

AeroCare in October 2017 purchased Buypap.com, which does business as SleepDirect.com. The e-commerce website focuses on direct-to-consumer sales of products that treat patients suffering from respiratory and sleep-related disorders.

Another respiratory therapy-focused DME provider in the market is Beecken Petty O’Keefe’s Preferred HomeCare/Lifecare Solutions, which is in a Houlihan Lokey-run auction.

Representatives of Peloton declined comment, while those with SV Life Sciences, AeroCare and Triple Tree didn’t immediately respond to requests for comment.

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