Medical equipment maker Medical Depot Inc. has begun restructuring talks with its senior lenders in advance of an expected liquidity crunch, the Wall Street Journal reported. The lenders recently signed a nondisclosure agreement to access privileged information about the medical equipment company. The company, which operates under the name Drive DeVilbiss Healthcare and manufactures wheelchairs, canes, walkers and other medical equipment, has more than $600 million of debt. Medical Depot is owned by private-equity firm Clayton, Dubilier & Rice, and was formed in 2015 via the merger of Drive Medical and DeVilbiss Healthcare. However, the merger didn’t result in achieving the synergies that were initially projected. In June, ratings agency Moody’s Investors Service cut Medical Depot’s ratings further into junk territory, to Caa2 from Caa1, saying that the company’s capital structure was “unsustainable absent significant improvement in operating performance.” Moody’s pegged the company’s revenue at around $900 million.
