Making acquisitions can increase your size and your capabilities.
When Med-XS Solutions
was incorporated in
1997, its goal was to provide the health care industry solutions for excess medical equipment by offering
removal, storage and resale
services to medical facilities.
Over the past 10 years, Med-XS
has grown significantly both in
size and capability, acquiring
several companies to complement its portfolio of services
and further broadening its
presence in the medical equipment management industry.
For Med-XS president Kevin
Tenkku, the process of assessing a prospective acquisition’s potential benefits has
become second nature.
“In the medical equipment sales and service
market, we have been successful by constantly researching companies that offer at
least one of the products in our portfolio,”
Tenkku says. “Then we review if that company operates profitably while providing a superior customer experience.
“We compare it with our own organization’s
strengths and weaknesses and make the
decision of whether an acquisition would
benefit the company, improve our relationships with our current clients, provide access
to new clients and make us more attractive to
prospective customers.”
Only if all these factors align can Tenkku
move forward in considering the acquisition.
Recognizing your own company’s need to
acquire another company is relatively simple,
Tenkku says. Considering another company’s
products and assets, could you grow your
own company more easily with the acquisition or without it?
With Med-XS’ first major acquisition of
Neoforma GAR Inc. in 2001, Tenkku foresaw
the potential benefits of buying the company.
“We made an acquisition of a medical equipment auction company that had many health
care facility contracts that we found attractive,” Tenkku says. “We were not proficient at
auctions at the time and we needed to
increase our contracted business more than
anything. Our research also showed that auctions were another logical way to increase
our pipeline of medical equipment, so we
bought the company.”
Following up that purchase with the acquisition of refurbished equipment provider HealthQuip Inc. and equipment refurbisher
Johnson Biomedical Services in 2005 and
2006, respectively, Med-XS now offers a
much broader range of services, although
Tenkku says the process is never without
complications.
“You need to realize that making an acquisition is not a smooth process, and it can be
confrontational because you are implementing changes to an existing organization,”
Tenkku says. “Our company has realized success in gaining direct access to the inner
workings of successful companies and either
assimilating that company or duplicating its
best practices.”
Tenkku says that in his experience, the
process of making an acquisition is an organic one and, as such, no two are ever the same.
“It is imperative that a company analyzes
the challenges and takes quick action to
avoid any conflicts that would result in negative impact on sales and operations,” Tenkku
says. “Clearly communicating the established
corporate culture is imperative. At the same
time, you must convey your mission, vision
and goals to the acquired company in order
to ensure that everyone understands the corporate direction.”
Tenkku is careful to point out that, above
all, the process of incorporating two companies requires a level of patience from all those
involved.
“If you look for success with a long-term
perspective, then you will be able to realize
your goals,” Tenkku says. “However, if you
think that an acquisition is a simple, quick fix,
then you will be disappointed by the outcome.”
HOW TO REACH: Med-XS Solutions, (800) 670-7874 or
www.medxs.com