Brian Buntz

March 9, 2016

1 Min Read
6. Rapid Pace of Acquisitions

6. Rapid Pace of Acquisitions

Graham-Field Health Products Inc. still makes thousands of items for healthcare and home health care settings. But the company had its own run-in with default in 1999 after a rapid series of acquisitions in the late 1990s. Then-CEO Irwin Selinger had the company do eight acquisitions in 1996 and 1997. By 1998, Selinger was resigning as the company struggled to smoothly digest the acquisitions amid a string of unprofitable quarters and substantial severance, inventory write-downs, and asset write-offs. Selinger would later be convicted and sentenced to prison over securities fraud and conspiring to inflate the value of Graham-Field's stock in order to save the company money on a merger, according to S&P.

Could Graham-Field's story be a warning for medtech companies gripped in the industry's present M&A frenzy?  "There are often operational challenged or hiccups when integrating acquisitions ... It's primarily when multiple acquisitions are being integrated simultaneous that we see risk growing exponentially," Kaplan says.

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