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Special report: Acquisitions rife in medical parts industry

by Diana Bradley, Staff Writer | August 20, 2012
From the August 2012 issue of HealthCare Business News magazine

Most often, this consolidation centers on OEMs acquiring after-market parts providers as a way to launch or expand a multi-vendor service model. Lately, independent service organizations are strategically aligning with parts organizations as an expanded offering or differentiator – creating a win-win for the service provider and the parts business, Suffridge notes.

“For example, take ARAMARK’s acquisition of ReMedPar,” he says. “Through the acquisition and subsequent integration activities, ARAMARK was able to enhance its parts supply chain, while, at the same time, creating a market opportunity by investments in ReMedPar operations, inventory, and sales to the commercial market. It is partnerships like this that will propel the industry forward.”

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At the end of the day, overarching rationale behind these mergers is not exactly rocket science, according to Josh Glas, president of Adam Imaging Parts, Inc.

“Although not privy to the inside information, I think it’s fair to assume that the acquiring companies are looking at their market strategy, identifying weaknesses, and finding a suitable partner that can compensate for these weaknesses,” he says.

Looking ahead, consolidation will slow down considerably, according to Steve Cannon, president of AllParts, a company that provides replacement parts to the imaging equipment service community and stocks over 30,000 parts. Following the acquisition of MasterPlan, ReMedPar and Mesa by ARAMARK in March 2011, and the ensuing acquisition of AllParts Medical by Philips in June 2011, merger/acquisition activity in the replacement parts sector of health care has been essentially non-existent, he notes.

“We believe there will be continued merger and acquisition activity in the medical equipment service and alternate service management sectors, such as medical equipment maintenance insurance,” says Cannon.

The problems with parts
Image courtesy
of BC Technical, Inc.

As health care technology constantly changes and evolves, medical equipment parts providers always need to be one step ahead of the game. Although a challenge, Suffridge notes that this aspect of the industry alone keeps providers engaged and excited.

“The volume of manufacturers, makes and models expands every day, and, each new system introduced creates a new parts

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