Anyone know the healthcare equipment distribution space?

searcher profile

March 25, 2025

by a searcher from Southern Methodist University in Dallas, TX, USA

Looking at a company in the medical equipment distribution & service space. Like a wholesaler for things like MRIs and X-ray machines (and all kinds of ancillary parts), selling to private practices, emergency rooms, vet clinics, etc. Very specialty kind of distributor. Questions I have are:
- what are people's opinions about where that industry/niche is going?
- how to think about Congressional Budget / Medicare/Medicaid exposure and risk?
- what are the hot-button things that I should focus on in due diligence (if I were to go under LOI)

For this business specifically:
- they have done about 800-900k in SDE/adjusted EBITDA (although, I found out a few hundred k is inventory write-offs each year)
- They have exposure to markets all over TX... namely Dallas but also San Antonio and a few others.
- They do both equipment sales as well as technician repairs to equipment (which I really like); 66/33 on revenue for those two divisions. In 2024, equipment sales were down about 20% (apparently the whole industry suffered by about that much with the uncertainty around inflation and election).
- Pretty nice margins for being a distributor. They margins also get lift from the service revenue.

Any thoughts would be greatly appreciated! Thanks!

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commentor profile
Reply by a professional
from Villanova University in West Chester, PA, USA
Hi ^redacted‌, in terms of due diligence, focusing on any contracts, compliance obligations, and areas of potential liability are important. We also discuss due diligence on episode six of our podcast, Dealmaking with Laura DiFrancesco, available here https://www.deanstreetlaw.com/links
commentor profile
Reply by a searcher
from Indiana University (System) in Carmel, IN, USA
Connor, I’m familiar with this space. Happy to look at the deal and provide support where I can. Feel free to reach out: redacted
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