The durable medical equipment (DME) supplier market is highly fragmented and competitive with over 6,000 companies. The sector is comprised of national competitors, scaled regional businesses, product specific distributors, and mom and pop operators.
Competition among DME suppliers is based on pricing, breadth of product offering, performance, relationship with physicians in the locality, strategic location of facilities, and customer service and delivery. The market has been witnessing strong consolidation during the last five years. Publicly traded DME suppliers such as Pro Tech Home Medical (PTQ), AdaptHealth Corp.(AHCO), and VieMed Healthcare (VMD) have acquired several smaller, regional operators in the recent years.
The current market multiples among the three publicly traded suppliers ranges between 8.8x and 11.6x EBITDA. Smaller privately-held DME suppliers are being acquired at multiples ranging from approximately 5.0x to 9.3x EBITDA.