Owens & Minor Inc. announced the largest acquisition in the company’s history.
Owens & Minor has a $710 million cash deal to buy the surgical and infection prevention business of Georgia-based Halyard Health Inc.
Owens & Minor, a Hanover County-based international distributor of medical supplies, is expected to add about $1 billion in revenue and $80 million of annual operating profits. The deal is expected to close in the first quarter of 2018, subject to regulatory approvals. The drug company started in downtown Richmond in 1882.
This is a significant step that will strengthen and diversify our business model with a market-leading portfolio of surgical and infection prevention products,” said P. Cody Phipps, chairman, president and chief executive officer of Owens & Minor.
The deal also expands Owens & Minor’s reach into new markets. International markets such as Japan, Canada, South Africa, and Australia are expected to be added. The company was already a customer of Halyard. Halyard’s unit has plants in Mexico, Thailand, Honduras, and North Carolina. Owens & Minor utilized the Halyard's surgical and infection prevention business supplies such as sterilization wraps, surgical drapes and gowns, facial protection, protective apparel, and medical exam gloves.
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Employees of Owens & Minor Inc. work on picking up medical products for customers at the company’s distribution center in Hanover County.[/caption]
A spokesperson for Owens & Minor said the deal includes global manufacturing facilities with about 8,000 employees. The company plans to finance the transaction with a combination of cash and debt. Owens and Minor has obtained financing from Bank of America Merrill Lynch. In August, the company acquired Byram Healthcare, a White Plains, N.Y.-based distributor of medical supplies, for about $380 million in cash. That deal extends the company’s sales of medical supplies beyond hospital settings and into home health care.
In February, Owens & Minor announced it was leasing 90,000 square feet in the Riverfront Plaza building in downtown Richmond to serve as a client engagement center with about 500 employees. Those plans are progressing, with employees moving into the building starting in December.
