Palladium Acquires DME Express from WayPoint

Palladium Equity Partners has agreed to acquire a majority equity interest in DME Express, a provider of durable medical equipment, from WayPoint Capital Partners.

DME Express provides beds, respiratory equipment, and mobility equipment under recurring per-patient-day contractual arrangements, serving both hospice organizations and their patients either in homes or at facility-based hospice settings. DME serves customers across the United States through an operating network of more than 70 warehouse locations in nine states. The company is led by founder and CEO Mark Borneleit and is headquartered near Houston in The Woodlands, Texas.

Palladium’s investment in DME is its second in the hospice industry and the second platform investment for its sixth fund, which has not yet announced a final close and is reportedly targeting $1.5 billion in capital.

“We are excited about our upcoming partnership with Palladium. Their prior experience in the hospice industry and working with founders seeking to scale their businesses makes them a strong partner to achieve our next phase of growth,” said Mr. Borneleit. “We look forward to collaborating together after the closing to expand our geographic footprint, enhance our service capabilities, and pursue strategic acquisitions to better serve hospice providers and the patients they support.”

“DME Express represents an exciting opportunity to partner with an experienced founder-led management team in a specialized healthcare services segment that benefits from demographic tailwinds,” said Rafael Ortiz, the head of healthcare at Palladium.

“I believe the company’s differentiated service model, operating footprint, and strong customer relationships position it well for continued growth and align with our prior investment experience in home health and hospice services,” said Daniel Ilundain, the president of Palladium.

WayPoint, which acquired DME Express in December 2016, will continue as a minority investor following the closing.

“We are very proud of the growth DME Express has achieved under WayPoint’s stewardship and the strong platform the team has built. Palladium will bring relevant sector experience that we believe will support the company’s next phase of expansion. Waypoint is excited to continue its support of DME Express after the closing as a minority investor alongside Palladium,” said Philip Edmunds, a managing partner at WayPoint.

New York City-headquartered Palladium invests from $50 million to $150 million of control equity in United States-based companies that have $10 million to $75 million of EBITDA and are active in the consumer, services, industrial, and healthcare sectors.

Palladium was founded in 1997 by Marcos Rodriguez and has invested in over 240 middle-market companies (41 platforms and more than 200 add-ons), with a focus on the U.S. Hispanic market, founder- and family-owned businesses, and companies in fragmented industries.

WayPoint Capital Partners makes control investments in North America-based founder- and family-led industrial and healthcare services companies with $5 million to $25 million in EBITDA. The firm was founded in 2004 and is headquartered in Stamford, Connecticut.

Cain Brothers, a division of KeyBanc Capital Markets, was the financial advisor to DME Express, and Edgemont Partners was the financial advisor to Palladium.