Joint Venture Expands Pressure Area Care Product Distribution Nationwide

Strategic Insights -

MEDIQ/PRN, Pennsauken, N.J., and HNE Healthcare (formerly Huntleigh Healthcare), Manalapan, N.J., have formed a joint venture to distribute pressure area care products nationwide. The venture will handle the rental distribution of HNE Healthcare's products to hospitals and alternate care facilities across the country. Initially, the pilot project will focus on the Southeast and Mid-Atlantic regions, with nationwide roll-out expected by June through MEDIQ/PRN's 85 service branches.

Key Takeaways:

  • The joint venture will be 50% owned by MEDIQ/PRN and 50% owned by HNE Rentals, Inc., Huntleigh Technology's U.S. subsidiary.
  • HNE Healthcare will provide pressure area care products, including the DFS-2, DFS, and Auto Excel DFS, which have earned FDA clearance for various care markets.
  • Andy Wood, senior product manager for HNE Healthcare, estimates the market size in those three segments to be as high as $500 million.
  • The joint venture will expand Huntleigh Technology's presence in the U.S. market.
  • The products will be distributed through existing service networks and current customers, including major group purchasing organizations.
  • MEDIQ/PRN's parent company, MEDIQ Inc., is exploring ways to enhance shareholder value, including the possible sale of its stock or assets.

Statistics:

  • Approximately 50% of Huntleigh Technology's production moves overseas to more than 60 countries.
  • MEDIQ/PRN has 85 service branches across the country.
  • HNE Healthcare estimates the market size in the three care segments to be as high as $500 million.
  • MEDIQ Inc. reported a net loss of $7.3 million for the year ended September 30, 1994.
  • Revenues for MEDIQ Inc. were cut in half to $168 million in 1994 compared with $366 million in 1993.
  • MEDIQ's stock has fluctuated from about $1.50 a share in 1991 to about $7 a share in 1992.

Sources:

  • "Healthcare Business Week", Volume 12, Issue 24
  • MEDIQ/PRN press release
  • HNE Healthcare press release
  • Huntleigh Technology financial reports
  • MEDIQ Inc. financial reports
  • Reuters and AP news articles