Owens & Minor (NYSE:OMI) announced today that it entered into a definitive agreement for the sale of its Products & Healthcare Services segment.
The company agreed to sell its P&HS segment to Platinum Equity, a private equity firm. Platinum agreed to pay $375 million in cash, while Owens & Minor retains a 5% equity stake in the business.
According to the company, this move transforms it into a pure-play market leader in the home-based care Market. It also preserves tax attributes in excess of $150 million.
Earlier this year, Owens & Minor announced that it began discussions around the sale of the unit as part of a strategy aimed at optimizing its business, leveraging the company’s Patient Direct platform. Patient Direct delivers home-based care for patients with chronic conditions.
Richmond, Virginia-based Owens & Minor says its strategic move helps to expand its leadership position in the market. The sale helps it focus on a simpler business model and allows for a more appropriate valuation in the segment.
“Today’s announcement represents another critical step forward in the strategic transformation of Owens & Minor into a leading, pure play home-based care platform,” said Edward A. Pesicka, president & CEO, Owens & Minor. “With the definitive agreement in place for Products & Healthcare Services, we will remain laser-focused on transforming the Company into a pure-play home-based care business that will drive even more value for our Patient Direct stakeholders. Going forward, we will be positioned among the leaders in a dynamic market where we will be able to capitalize on our leading brands and long-standing record of putting the patient first while delivering consistent revenue and profit growth. The ability to dedicate our resources to the more profitable part of the legacy business will be value-enhancing for many years to come,” Pesicka continued.
More on Platinum Equity as it acquires the Owens & Minor P&HS business
Pesicka called Platinum Equity “the perfect home” for Owens & Minor’s P&HS unit.
“Their commitment to building on the customer-centric legacy of the business and to strategically invest to stay at the forefront of the evolving healthcare market will serve all stakeholders very well long into the future,” Pesicka said.
The firm has invested in a number of healthcare and supply chain businesses, Owens & Minor said. It has 30 years of experience acquiring and operating global businesses as part of large corporate entities. That includes the $2.1 billion sale of LifeScan by Johnson & Johnson in 2018.
“Owens & Minor has played a vital role in supporting healthcare providers and patients across the country, and we are proud to invest in the future of P&HS,” said Jacob Kotzubei, co-president, Platinum Equity. “We are pleased to provide Owens & Minor a divestiture solution for P&HS and are grateful for the continued partnership. With the support of Platinum’s operational resources, we are committed to further enhancing P&HS’s global capabilities to deliver essential products and services when and where its customers need.”
