O&M offered $13.80 per share in cash for Medical action, representing a 93% premium over the stock’s average closing price over the last year. The news sent MDCI shares soaring from a close last night at $7.07 to a new 52-week high of $13.73 today.
OMI shares saw a much more modest boost, gaining 1.4% to trade at $35.33 as of about 3:10 p.m. EST today.
O&M said the acquisition will play an integral role in a strategy the company calls "Connecting the World of Medical Products to the Point of Care."
"The acquisition of Medical Action is consistent with our strategic focus and a natural extension of Owens & Minor’s core capabilities as we look to broaden our service offering," O&M chairman & CEO Craig Smith said in prepared remarks. "It meets the needs of both our provider and manufacturer customers by providing them a more complete and cost-effective solution for the delivery of procedure-specific product kits."
Medical Action posted nearly $288 million in net sales from continuing operations last fiscal year, nearly half of which was comprised of sales to O&M, according to a press release. O&M expects the acquisition to add to its non-GAAP net income starting in fiscal 2015.
The boards of both companies have already approved the transaction, which O&M plans to pay for with existing cash on hand and borrowings under its credit facility, the company said.