Owens & Minor to Sell Products & Healthcare Services Biz to Private Equity for $375M

Owens & Minor has begun a deal to sell its Products & Healthcare Services (P&HS) business to Platinum Equity.

Over the past few years, the company has been moving toward growing its leadership position in the home-based care space. This transaction will let Owens & Minor focus on a simpler business model and allow a more appropriate valuation in this segment.

Under the agreement’s terms, the company will receive a cash payment of $375 million at the sale’s closing. Owens & Minor will keep a five percent interest in the P&HS business as well as a preferred equity return.

The company will also retain specified tax assets, including federal net operating loss carryforwards and certain other tax attributes, which exceeds $150 million. The transaction is expected to close near the end of this year.

“Today’s announcement represents another critical step forward in the strategic transformation of Owens & Minor into a leading, pure play home based care platform,” said Edward A. Pesicka, president and CEO, Owens & Minor. “With the definitive agreement in place for Products & Healthcare Services, we will remain laser-focused on transforming the company into a pure-play home-based care business that will drive even more value for our Patient Direct stakeholders. Going forward, we will be positioned among the leaders in a dynamic market where we will be able to capitalize on our leading brands and long-standing record of putting the patient first while delivering consistent revenue and profit growth. The ability to dedicate our resources to the more profitable part of the legacy business will be value-enhancing for many years to come,” Pesicka continued.

In June, the company and Rotech mutually agreed to terminate their previously announced acquisition. Pesicka cited regulatory struggles as the reason for the deal’s termination.