Viemed Healthcare Inc. (Nasdaq: VMD) has finalized its strategic partnership with East Alabama Health.
The Lafayette, Louisiana-based Viemed provides home medical equipment (HME) and post-acute respiratory health-care services. East Alabama Health (EAH), meanwhile, is an organization that includes East Alabama Medical Center in Opelika and EAMC-Lanier hospital in Valley – two hospitals and collective service lines with about 3,700 employees and 380 physicians.
Under the strategic partnership, Viemed gains controlling interest of East Alabama HomeMed, LLC, a business that provides HME services to patients within the EAH network and surrounding areas. Financial terms of the arrangement were not disclosed.
“This marks a significant milestone in our ongoing growth strategy, which includes hospital joint ventures and institutional partnerships,” Viemed CEO Casey Hoyt said in a press release. “We view this transaction as a blueprint that can be replicated nationwide, enhancing care quality while simultaneously creating value for health-care systems.”
The transaction closed on April 1, with Viemed acquiring a majority ownership interest and assuming managerial responsibilities of HomeMed. EAH will retain a minority, non-controlling interest in the business.
Viemed expects incremental annualized revenue from the acquired operations of about $4 million. The HME company’s 2023 total revenue was about $183 million, up 32% compared to 2022.
Hoyt and other Viemed C-suite leaders teased their M&A plans during the company’s fourth-quarter earnings call in March. In 2023, Viemed completed its acquisition of Tennessee-based Home Medical Products (HMP), a large regional provider of respiratory-focused home medical solutions, while setting the stage for additional transactions in 2024.
“Our team does fully expect to incrementally grow inorganically through strategic JV partnerships and acquisitions in 2024,” Hoyt said during the Q4 call.
Generally, HME transaction volumes have dipped in recent years, at least compared to historic norms. Even so, the space is buoyed by plenty of long-term tailwinds, including America’s aging population, which has kept M&A alive even amid downturns.
Some M&A experts project that HME-related dealmaking will pick up in 2024 as interest rates and inflation stabilize.
