White And White Sells Business Will Dissolve
GRAND RAPIDS — Changing industry dynamics that require a higher degree of specialized management prompted home medical supplier White & White to sell off most of its business to larger firms.
White & White, a subsidiary of Metropolitan Health System and Borgess Health Alliance with $38 million in annual revenues, sold its respiratory, rehabilitation, infusion therapy and durable medical equipment services business lines to Lincare Holdings Inc., a Clearwater, Fla.-based firm that serves patients through 500 offices in 44 states.
Byram Healthcare, a Greenwich, Conn.-based provider of disposable home medical supplies, bought White & White’s wound, diabetic, urology, incontinence and ostomy business.
Financial terms of the transactions were not disclosed.
The move to dissolve the company came after White & White spent five months “looking at every conceivable option,” including joint ventures and outside management contracts, Chief Executive Officer Mary Scott said.
White & White had five separate business units that served the western half of the Lower Peninsula south of Ludington. Changes in the industry in recent years had White & White operating under an outdated business model, Scott said.
In the end, selling the divisions to firms that have an expertise in a particular field was the best course of action to take, Scott said.
“For each of the business units, in a larger structure, there are tremendous economies of scale,” she said. “Everything that was feasible, we explored. When everything was all said and done, this was best for the community, the employees, the patients and ultimately the owners.”
Because of their size and narrow focus, Lincare and Byram can operate more efficiently, as well as leverage more favorable purchase prices from manufacturers and better reimbursement rates through participating agreements with health insurers, Scott said.
“The future of home medical services belongs to those highly efficient companies that offer a more narrow range of services on a national or regional scope,” she said.
Metro Health owned a 93 percent stake of White & White, with Kalamazoo-based Borgess holding the remaining share. Most of the company’s 230 affected employees have been offered jobs by the new owners, Scott said.
White & White also sold two retail pharmacies in Grandville and Plainfield Township and will unload an inpatient pharmacy that sells medications to area nursing homes.
Scott, a senior vice president at Metro Health, expects the transition to occur over the next 30 to 60 days. White & White as a corporate entity will continue for about 18 months as it closes out its accounts receivables.
Lincare is one of the nation’s largest suppliers of oxygen and respiratory equipment to in-home patients. The publicly held company recorded 2000 sales of $702.5 million, a 20 percent increase over the year before, and earnings of $116.9 million.
The privately held Byram Healthcare, with about $60 million in annual revenues, has six warehouses and distribution centers nationwide. Its South Bend, Ind., distribution center will serve the Michigan markets acquired from White & White, Chief Executive Officer Ray Noeker said.
The deal with White & White fit into Byram’s strategy to rapidly grow the business, Noeker said.
“Something like the White & White transaction was very attractive to us,” he said.