PRESS RELEASE
Rowayton, CT - December 30, 2011 - Lakewood Capital is pleased to announce that a group led by Lakewood, GMH Ventures, Terry Luft and other existing members of management, has acquired Dynamic Healthcare Services, Inc., Harrisburg, PA, one of the region’s leading providers of home medical equipment and respiratory therapy products and services. DHS was founded by Mr. Luft in 2001 as a holding company comprised of two long-standing operating entities: East Suburban Medical Supply Co. (ESMS) and Central Medical Equipment Co. (CME). ESMS serves the western Pennsylvania market through operations in Pittsburgh, and Kittanning while CME serves the central Pennsylvania market through operations in Harrisburg, York, and Lancaster. With a broad product line including oxygen, sleep apnea, general rehabilitation equipment, coupled with a long-standing history in complex rehabilitation/mobility, DHS is able to serve a wide variety of market payors and referral sources, including referring physicians and clinicians, hospitals, hospice care facilities, sleep clinics and labs, care providers, assistive technology and mobility professionals, and direct to consumer. Its reputation as a leading specialist in complex rehabilitation/mobility enables the Company to serve a greater portion of a particular client’s needs than most traditional providers and provides for a more intimate relationship with many of its patients and referral sources. M&T Bank provided debt financing in support of the transaction.
Terry Luft, co-founder of DHS and current President and Chief Executive officer stated, “partnering with Lakewood and GMH will provide our management and employees with the resources not only to meet our customers’ needs, but also to provide innovative solutions in the future and improve the delivery of care to a diverse group of patients. We have always prided ourselves on our commitment to our customers and the quality of our products. Our expanded resources and support for investment from our partners provides us with unparalleled opportunities to expand our reach and ensure the highest quality service and care to our patients, referral sources, and payors, in every market we serve. The needs of patients have never been greater, and the focus on quality of life is of paramount importance. We are excited about being on the forefront of meeting the growing demand for durable medical products and services with innovation and sensitivity while doing so in a way that enhances the strength and stability of the industry.”
Roger Knight, founding partner of Lakewood Capital, added, “We are particularly excited about joining with such a strong group of middle market focused partners on DHS. The collective experience of the investor group coupled with the strength and depth of DHS’ management is a powerful combination to steer the Company through its next stages of development. The healthcare industry has been undergoing constant change and the series of transitions industry players must face are difficult for lower middle market companies to address. DHS is well positioned to maneuver in this shifting market and has the management experience and the financial resources to grow and excel as the industry evolves.
The combined company is uniquely positioned in the lower middle market with its product offering, multiple channels of distribution, and market reputation given Terry’s involvement in the industry for nearly 30 years, including several years as President of the PA State Association of Medical Suppliers. With limited concentrations in product offering, payors, and referral sources, DHS will be able to grow organically and through acquisition in a manner that will benefit all parties involved. This will be particularly true for the smaller competitor looking to strengthen his operation in response to continued market transition.”