Owens & Minor (NYSE:OMI) will not proceed with its planned acquisition of Rotech Healthcare, citing challenges in securing regulatory approval.
After months of engagement with the Federal Trade Commission, the two companies agreed to terminate the transaction. Owens & Minor paid Rotech $80 million as part of the termination terms.
“For many months, our teammates, along with the Rotech team, have worked tirelessly in cooperation with the Federal Trade Commission to close this transaction, and while we believe there would have been ample benefits to patients, payors, and providers by adding Rotech to our Patient Direct business, the path to obtain regulatory clearance for this merger proved unviable in terms of time, expense, and opportunity,” Owens & Minor President and CEO Edward Pesicka said in a news release.
The company also said it will redeem $1 billion in notes issued to finance the acquisition and cancel related loan commitments. (When announced last year, the proposed deal had been valued at nearly $1.4 billion.)
Owens & Minor reaffirmed its focus on home-based care and plans to continue growing its Patient Direct business. The company said it will prioritize deleveraging efforts through improved cash flow generation and explore a potential sale of its Products and Healthcare Services segment.
Said Pesicka: “The home-based care market is a dynamic, growing market, and we are extremely well-positioned to help those with chronic conditions get the care and service they need and deserve. Also, we continue to work with a number of interested parties around the potential sale of our Products and Healthcare Services business, and, in the meantime, we will continue to actively work to strengthen that business and tap into its significant upside.”
Owens & Minor had first announced plans to acquire Rotech Healthcare — a privately held home-based care business.— in July 2024.
