InfuSystem Holdings Acquires First Biomedical, Inc.

June 2010       Download PDF      Print

Client Objective

First Biomedical, Inc. (FBI), a supplier of medical infusion pumps based in Kansas City, began making significant inroads into hospitals and physician offices in 2009 and 2010. As a result, the company began posting increasingly impressive financial results and attracted the attention of InfuSystem Holdings, the leading supplier of infusion services to oncologists and outpatient treatment facilities in the United States. At the time, the owners of FBI were not actively seeking a buyer for the business. However, when InfuSystem made an offer to acquire the company, Tom Creal, the primary shareholder of FBI, recognized the need to take advantage of the opportunity. FBI immediately contacted Allied Business Group to request our assistance throughout the negotiation process. Crealís goal was to obtain maximum value for the company, while securing employment for himself and his employees.

Solution

Allied Business Group began by exploring all of FBIís strategic options in order to negotiate the best possible purchase price. We created marketing documents highlighting the companyís past financial performance and future earning potential. These documents helped quantify the cost-saving measures and revenue-generating activities that would be created by combining the two companies. We also reviewed critical aspects of the company that are typically scrutinized by prospective buyers, such as working capital and inventory management issues. In addition, we advised our client during negotiations to help them secure a satisfactory price for the company and minimize their tax liability.

InfuSystemís owners were former investment bankers, and as such, recognized that FBI was a good strategic fit with their company; however, they also knew that they needed the right management team in place to realize the potential synergies. FBI had a strong team of managers in place, who along with Creal, wanted to continue growing the company.

Result

A 100% interest in FBI was sold to InfuSystem Holdings for $17.2 million in April 2010. As a result, FBI gained access to a new customer base, a solid marketing infrastructure, and back-office support. Moreover, the company stayed in Olathe as a wholly owned subsidiary and Tom Creal remained President. The other owners also obtained employment agreements as was desired. Ultimately, our client received full value for the business as well as for the potential synergies that existed with InfuSystem Holdings.

About First Biomedical Inc.

Founded in 1988 by Tom Creal and Dan Wassall, First Biomedical Inc. rents, sells, leases and services more than 75 models of medical pumps and related equipment. Such pumps include ambulatory infusion pumps, pole-mounted infusion pumps, syringe pumps, and enteral pumps. With over 50 employees, the company recorded sales of $9.8 million in 2009.

About InfuSystem Holdings

InfuSystem Holdings is the leading supplier of infusion services to oncologists and outpatient treatment facilities. It provides pole-mounted and ambulatory pumps, supplies and related clinical biomedical and billing services to practices and patients nationwide.