Quadrant eyes sale of QMES, medical equipment provider

  • DME company formed in ’12 via various acquisitions
  • Company posts ~$100 mln Ebitda: source
  • Sale process is in late stages: sources

Quadrant Management is exploring the sale of QMES LLC, the East Coast-concentrated distributor of oxygen-therapy products and other durable medical equipment, according to four sources.

J.P. Morgan Securities is providing financial advice to the Oaks, Penn.-based company, the sources said.

The process is in its late stages, sources indicated, though it remains unclear whether a buyer has been selected.

QMES generates Ebitda of around $100 million, one of the sources said, while another speculated the company could command a multiple of Ebitda in the ballpark of 8x.

CIT Group in March announced it had provided a $175 million senior secured credit facility to QMES, which the company said would be used to refinance legacy debt, support its growth trajectory and make strategic acquisitions.

Formed in 2012 through various acquisitions, QMES provides durable medical equipment (DME) and respiratory therapy products and services to patients in their homes through various affiliates: Ocean Medical, Montgomery Medical, Landauer/MedStar and Roberts Home Medical, among others.

QMES’ geographic presence spans New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia and West Virginia.

QMES’s chairman and CEO is Luke McGee, a principal at Quadrant Management, a New York private investment and restructuring firm.

The anticipated sale of QMES comes amid a resurgence of interest in DME companies as the space becomes more stable from a regulatory standpoint, while also presenting an opportunity to transact at lower deal multiples.

In other brewing activity, Beecken Petty O’Keefe & Co’s Preferred Homecare/Lifecare Solutions — a smaller provider of respiratory-therapy equipment and services — is currently seeking a buyer via a Houlihan Lokey-run process, Buyouts previously reported.

Other notable providers in the oxygen-therapy market include Linde Group’s Lincare, Blackstone Group’s Apria Healthcare and Rotech Group.

Representatives of Quadrant, QMES and J.P. Morgan could not immediately be reached on Friday.

Action Item: Quadrant Management can be reached at 212-231-3906