LINCARE HOLDINGS INC. /Clearwater, Florida Graying Of Population Heightens Demand Here.(INTERNET & TECHNOLOGY)

Byline: Kirk Shinkle

Lincare Holdings Inc. has plenty of breathing room. It's one of the two top players in the home respiratory therapy business.

The Clearwater, Fla.-based firm holds 16% of a market worth $4 billion to $5 billion. Its job is making sure that patients with chronic respiratory diseases keep breathing easily.

An aging population is pumping up demand for Lincare's services. Census data show the group of Americans aged 85 and older is growing about 3.5% a year. They're most likely to suffer from emphysema, bronchitis, asthma and similar diseases. About 15 million Americans are afflicted today.

"As a country we're not making much progress on respiratory diseases," said analyst Peter Emch of Credit Suisse First Boston. "When someone gets on oxygen, they're typically on it for the rest of their lives."

To keep up, Lincare is on a fierce acquisition pace, buying more of the mom and pop operations that make up the lion's share of competition.

In the second quarter, the firm bought eight small players with combined revenue of $30 million.