Owens & Minor to Acquire Rotech for $1.36 Billion

Owens & Minor began a deal to acquire Rotech Healthcare Holdings, a privately-held, home-based care business. The transaction is valued at $1.36 billion, which will be paid in cash.

Orlando. Fla.-based Rotech provides home medical equipment in the U.S. The company has more than 4,200 employees and operates in 46 states through about 325 operating locations. Rotech garnered about $750 million of revenue with an EBITDA margin of almost 30% last year.

The deal strengthens Owens & Minor’s Patient Direct offerings by expanding a complementary portfolio that includes respiratory, sleep apnea, diabetes, wound care, and the durable medical equipment (DME) market. The company said adding Rotech allows a synergy opportunity of about $50 million by the end of year three following the transaction’s close.

The acquisition of Rotech boosts the growth path for the Patient Direct business to reach $5 billion by 2028.

The transaction is expected to close by the end of this year.

“Rotech squarely fits into our existing Patient Direct segment and directly aligns with the strategy we outlined last December during our Investor Day, supporting our expansion in the very large and fast-growing home-based care space. We are excited to acquire a high-quality company like Rotech, an opportunity that doesn’t come along very often, and I look forward to welcoming the Rotech teammates into the Owens & Minor family,” said Edward A. Pesicka, president and CEO of Owens & Minor.

“The team and I look forward to being part of Owens & Minor due to their commitment to providing best-in-class products and services to patients in their homes. Owens & Minor is a natural home for the Rotech team, and we believe the combination will benefit patients, providers, payors, and employees,” added Rotech president and CEO Robin Menchen.