Had a conversation today which isn't, perhaps, being talked about openly. Private equity in O&P - Hanger, Blatchford, La Garrigue, Willow Wood, Ability Matters/Ortho Europe/Opcare, Ossur is owned by a hearing aid company, OHI and there are others.
What do you think? Are these guys really Gordon Gecko types stripping the good bits out or are we seeing an addition of real value into the industry.
There may be a load of new products but I guess not many salary increases which may increase the pull of new graduates and technical staff.
We also have an issue when coming to valuations with an average of 1:1 on revenue based on what is a DME product shifting market. Not that attractive to the VC community where new cash could come from. Are we destined to become package of care businesses where higher valuations will lead to higher returns?
Do we see these PE backed O&P providers being sold after 3 years to the larger Rehab based operators and systems?
#orthotics #prosthetics #orthoticsandprosthetics
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