MEDICAL EQUIPMENT: Supplier Uses Buyouts For Successful Expansion
Today's Los Angeles Times profiles one Orange County medical equipment supplier's success at acquiring distributors and competing "in a market dominated by huge rivals." Fifty-eight-year-old Frank Schyving has built up his Perigon Medical Distribution Corp. by "targeting small, well-managed distributors around the country" and absorbing them into a larger corporate structure. Schyving is challenged by a smaller capital pool than his competitors to finance his acquisitions. But alongside an initial $18 million from venture capitalists, Schyving recently landed "an additional $22 million in bank financing." His five-year goal is "to boost annual company sales to $250 million ... and take the company public." Smith Barney analyst Vivek Khanna believes, however, that to do so, Schyving must have "access to cheaper capital" in order to "outfox big competitors" like McKesson Corp. of San Francisco. Reflecting on his strategy, Schyving said: "You invest early as a private company, get your infrastructure in place and, as you buy additional companies, you add value more quickly" (Marsh, 7/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.