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Q3 2023 Durable Medical Equipment Update

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Q3 2023 Durable Medical Equipment Update

Durable Medical Equipment (DME) M&A activity in Q3-23 slowed to a degree as several large, strategic consolidators have navigated the effects of rising interest rates, leadership transitions, and other strategic initiatives. Notably, AdaptHealth, National Seating & Mobility, and Advanced Diabetes Supply have all replaced key executives in the past several months, which has led to a reduced focus on M&A driven growth.

The absence of competition from these historically aggressive groups, coupled with a challenging debt financing market, has created downward pressure on valuation multiples and a less attractive market for sellers looking to explore an M&A process.

That said, opportunistic strategic platforms and private equity groups have capitalized on the less competitive market environment to acquire attractive assets at reasonable valuations. Henry Schein’s recent acquisition of Shield Healthcare stands out as a recent example, and we’ve seen more nimble platforms such as Reliable Medical (backed by Seven Hills Capital) remain extremely active. Provident has seen premium assets are still attracting competitive multiples in this market environment.

Provident is expecting an uptick in M&A activity in Q4 and into the early portion of 2024 as interest rates normalize and these larger acquirers work through their leadership transitions and shift their focus back towards inorganic growth.

To print and download the full DME Update report, please click below…

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