Medical Action Industries (NSDQ:MDCI) said it inked a deal with Inteplast Group’s Medira Inc. to sell its Medegen Medical Products subsidiary for $75 million.
The sale also includes some of Medical Action’s patient care business, according to a press release.
"We believe that the completion of this transaction represents an attractive outcome for our company and stockholders. It will reduce our exposure to volatility in resin pricing and enable us to focus additional time and resources on building stockholder value through the optimization of our remaining business units," Medical Action CEO Paul Meringolo said in prepared remarks. "In addition, it will significantly strengthen our balance sheet and facilitate our pursuit of synergistic business opportunities and acquisitions."
Brentwood, N.Y.-based Medical Action said it plans to use the proceeds from the deal, expected to close in 3 or 4 months, to pay down its debt and for working capital.
"We value the technical expertise and market leadership of Medical Action. Their Patient Care business will greatly enhance Inteplast’s existing portfolio of medical and hospital supplies. We look forward to working with Medical Action to complete this deal and to working closely with its managers and associates to effect the smoothest transition possible, so that we can retain, as well as build upon, the culture and the strengths of this great company. Furthermore, we believe that the combined strengths of Medical Action and Inteplast will enhance our ability to service all existing customers with an even greater portfolio of product offerings," Inteplast communications director Brenda Wilson said in a statement.
