Posted on April 21, 2021 by Aaron Warwick
This morning, InfuSystem (INFU), a health care service provider, facilitating outpatient care for durable medical equipment manufacturers and health care providers, announced the acquisition of OB Healthcare Corporation, a privately held, Texas-based, biomedical services company. Terms of the deal were not disclosed. This is now the second acquisition in two months of a durable medical equipment (DME) company. The first, an acquisition of FilAMed, was announced on February 3, 2021.
What interests me the most about these two transactions is how INFU has connected the acquisitions on the DME side of their business with a focus on how these acquisitions will help them essentially enter a new market–the acute care market–on their integrated therapy services (ITS) side of the business. I discussed this with INFU CEO Rich DiIorio on the Q4 2020 earnings call. While the DME addition to INFU’s business is good, the ITS aspect is even more lucrative as it is a higher margin, recurring revenue model. In other words, these two acquisitions seem to be a double win for INFU, allowing them to expand both the DME and ITS side of their business.
Disclosure: I am long INFU and may buy or sell shares at any time.