Lake Forest-based home healthcare provider Apria Healthcare Group Inc. is starting its new life as a privately held company without its longtime chief executive.
Larry Higby, 63, stepped down last week as Apria’s chief executive as the company wrapped up its sale to private equity firm Blackstone Group LP in a $1.7 billion buyout.
For now, Higby’s staying on as vice chairman and as an adviser.
Higby, who had been looking to retire, said the timing was right.
“If the company wasn’t in good shape,if there were problems or if it were a turnaround situation,I never would have left,” he said.
He said he told Blackstone he didn’t want to stay longer than two years after the sale went through.
“I think they felt that they needed somebody who was going to be there for four or five years,” Higby said. “So this was a logical time for a shift to occur.”
Blackstone’s buy of Apria is notable because it’s one of few big deals that have gone through at a time when financing is hard to come by.
Blackstone hasn’t finalized financing for the Apria buy but has lined up Bank of America Corp., Wachovia Corp., which is being taken over by Wells Fargo & Co., and Barclays PLC to provide debt financing, according to a report from Private Equity News.
New York-based Blackstone “had been tracking the company for a couple of years and saw the continued growth and improvement,” Higby said.
Blackstone saw a healthcare company like Apria as a good long-term investment, according to Higby.
Apria has yearly sales of $2.3 billion and provides breathing, drug and other treatments to patients in their homes.
Some parts of healthcare, particularly those that are paid for by health insurance, have held up in the economic downturn. Others that rely more on consumers have had a tougher time.
Apria’s shares rallied 50% last week as the stock closed a gap with Blackstone’s per share offer.
The company talked with other buyers, “but Blackstone clearly was the most persistent and certainly was doing the most work,” Higby said.
In 1997, Higby joined Apria as president and chief operating officer and became chief executive in 2002. He succeeded turnaround specialist Philip Carter, who now runs Rotech Healthcare Inc., a Florida-based rival.
Higby said he plans to step up his involvement in several groups, including the Orange County Performing Arts Center, South Coast Repertory Theater and the New Majority, a moderate Republican group.
He said he plans to be involved in the 2010 California governor election. Higby also plans to work on reform of kindergarten through 12th grade education.
He said he also intends to spend more time sailing and “a lot of time with my family.”
Higby is married with four grown children.
Apria came about in 1995 through the combination of Abbey Healthcare Group Inc. of Costa Mesa and Fountain Valley-based Homedco Group Inc.
The company went through a few years of computer billing glitches and board fights before turning into a solid industry player, even if the grandiose expectations of some for home healthcare didn’t pan out.
“The company is on solid footing; it’s clearly a leader in home healthcare,” Higby said.
Blackstone’s ownership, Higby said, will allow Apria to make investments and work on growing the company without the pressure to meet quarterly expectations. He said Apria’s board “clearly felt” that it would be better off as a private company in order to accomplish those goals.
“The real issue was finding the right partner to do that with,” he said.
Higby said he won’t be a part of the search for Apria’s new chief executive.
“I don’t think CEOs should pick their successors,” he said.
Norman Payson, a former managed care executive and Apria’s executive chairman, is serving as interim chief executive while Apria conducts a search.
