Grant Avenue Capital invested $55 million into medical equipment provider Performance Home Medical (PHM), Grant managing partner Buddy Gumina tells Axios exclusively.
The big picture: By 2030, 80 million people will have aged into Medicare — and many of them will be in need of home care and services.
Catch up quick: Grant Avenue made a majority investment Kent, Washington-based PHM late last year. It was previously owned by two Pacific Northwest-based health systems, which were leveraging PHM as their DME provider for discharged patients.
- Gumina declined to disclose the names of the systems.
What's next: "We expect to be quite active in terms of tuck-in M&A," Gumina says.
- "We've also been able to launch a new service line in the continuous glucose monitoring category," he says.
How it works: Founded in 2011, PHM provides home care services and equipment to patients in need of obstructive sleep apnea devices, oxygen, ventilators and CGM technology.
- It serves over 70,000 patients primarily in the Pacific Northwest, with more than 20 locations across Washington, Oregon and Idaho.
- Grant Avenue's typical sweet spot is investments with between $5 million to $25 million of EBITDA.
Context: Of the eight carve-outs Grant Avenue has completed since being founded in 2017, three were formed from hospital system assets — including its physical therapy business H2 Health.
- "We truly go out and manufacture these deals," Gumina says. "It takes elbow grease and grit."
- Given the fragmented and broad home medical equipment market, Grant Avenue vetted about 300 prospective investments before conducting a "very organized direct outreach program to identify the best target," he says.
- Key to success in carve-out deals is flexibility on transition services agreement, he says.
