Home Health Depot acquired by Florida-based Lincare

Indianapolis-based medical equipment firm Home Health Depot Inc.—one of the country's fastest-growing medical companies from 2004 to 2014—has been acquired by Clearwater, Florida-based Lincare Inc., company officials announced Tuesday.

Terms of the deal, which closed June 28, were not disclosed.

Home Health Care was majority-owned by David Hartley, a former medical equipment salesman, and Nate Feltman, who was Indiana's secretary of commerce from 2006 to 2008.

Feltman told IBJ it became apparent a few years ago that it would be increasingly difficult for the business to remain profitable as a smaller diversified company in the current home health care marketplace because of declining reimbursement rates from Medicare and Medicaid. It was then the owners began taking steps to sell off the business in segments.  

He said Lincare and Lake Forest, California-based Apria Healthcare Group Inc. are destined to dominate the marketplace for years to come because of their size. Lincare is a respiratory-care subsidiary of the Linde Group, a Germany-based multinational corporation that had revenue of $10.8 billion in 2016.

Founded in 1998 as a small retail store in Greenwood, Home Health Depot took off after Hartley acquired it for $85,000 in 2004.

Over the next six years, Hartley grew the business from a single office in Greenwood to 12 locations in Indiana and Illinois. Annual revenue grew from $300,000 to more than $6.7 million.

Growth continued after Hartley partnered with Feltman, who gave up his partner position at law firm Baker & Daniels to become company president and 50 percent owner in 2010.

The diversified medical equipment provider was recognized by Inc. magazine as the 59th fastest growing health care company in America in 2012.

IBJ named Home Health Depot the 16th fastest-growing private company in the area after revenue grew from $18.7 million in 2011 to $30.5 million in 2013. Revenue peaked at $32 million in 2014.

Company employment rose from 28 in 2008 to a high of 260 over the next six years. By the end of 2014, the company had five divisions in six states and Indiana offices in Bloomington, Columbus, Fort Wayne, Indianapolis, Lafayette, Marion and Muncie.

While initially fueling growth, Home Health Depot's diversification eventually began to work against it as the smaller divisions had to compete against larger competitors.

Home Health Depot began selling off divisions to private-equity firms three years ago. National Seating & Mobility, backed by Court Square Capital Partners, bought the company’s Complex Rehab Technology Equipment division in 2014 and its Home Access unit in 2016.

Earlier this year, Home Health Depot sold its Atlanta-based hospice-equipment subsidiary Genesis Healthcare Services to Tailwind Capital Group-backed National HME Inc.

Home Health Depot was down to 100 employees by the time it put together the final sale. Most of those employees were given opportunities to work for Lincare, Feltman said. Hartley and Feltman, who will work with Lincare on the transistion over the next year, still had 40 percent stakes in the company at the time of the sale. Two other investors each had 10 percent shares.

Feltman said he and Hartley, who are both 47, plan to pursue more business opportunities either together or separately after they complete their stay at Lincare, but nothing is in the works yet.

Feltman said financial returns from the sale were good, and his experience with Home Health Care was a positive one both on a professional and personal level.

“Building one of the most diverse, patient-focused medical equipment companies in the United States with my long-time friend David Hartley was an incredibly rewarding experience,” Feltman said in written comments. “With the sale of our company in four separate transactions to private equity-backed companies, the market validated the incredible company Dave and I built with committed and talented colleagues.”