Owens & Minor (NYSE:OMI) today announced it entered into a definitive agreement to acquire Rotech Healthcare Holdings for nearly $1.4 billion in cash.
Rotech is a privately held home-based care business. The deal is valued at $1.36 billion in cash with tax benefits of approximately $40 million, resulting in a net purchase price of approximately $1.32 billion.
The Orlando, Florida-based company provides home medical equipment in the U.S. It has over 4,200 employees and provides products and services in 46 states through approximately 325 operating locations. According to Owens & Minor, Rotech generated approximately $750 million in revenue in 2023 with an EBITDA margin of nearly 30%.
“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,” Owens & Minor President and CEO Edward Pesicka said in a news release.
This acquisition strengthens Owens & Minor’s Patient Direct product offerings by expanding numerous portfolios, including respiratory, sleep apnea, diabetes and wound care. It also provides access to the durable medical equipment market.
“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,” Rotech CEO Robin Menchen said in a news release.
