Owens & Minor (NYSE: OMI) has acquired Rotech Healthcare Holdings, an Orlando, Florida-based home medical equipment (HME) supplier with nationwide reach.
In a July 23 press release, Owens & Minor said it had agreed to pay $1.36 billion in cash to acquire Rotech Healthcare, with a net price tag of approximately $1.32 billion after tax benefits.
The announcement described Rotech as “a national leader in providing home medical equipment in the United states,” with more than 4,200 employees and 325 locations in 46 states.
“Rotech generated approximately $750 million of revenue and an EBITDA margin of nearly 30% in 2023,” the announcement added.
“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,” said Edward A. Pesicka, president/CEO of Owens & Minor. “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.
“This transaction highlights our disciplined approach toward inorganic growth, with a focus on strategic fit, value creation for shareholders, prudent capital allocation and most importantly, providing improved service and experience to patients, providers and payors.”
“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,” said Rotech President/CEO Robin Menchen. “Owens & Minor is a natural home for the Rotech team, and we believe the combination will benefit patients, providers, payors and employees.”
Owens & Minor describes ‘strategic rationale’ for acquisition
Rotech’s product and technology categories include airway clearance therapy, diabetes management, hospital beds, mobility aids, nebulizers, oxygen, sleep apnea, ventilator therapy, wheelchairs, and wound care.
Owens & Minor said the “strategic rationale” for acquiring Rotech includes strengthening patient-direct offerings; supporting a combined customer base that enables the company “to better serve providers and payors across an integrated national network; being able to more comprehensively support patients via complementary product offerings and improved service for patients living with chronic conditions; and the opportunity for “significant synergy” of approximately $50 million by the end of year three, “with further upside potential, as well as [the] prospect for additional revenue synergies in both the near and long term.”
The acquisition “accelerates the growth path for the patient-direct segment as outlined at the December 2023 Investor Day to achieve $5 billion in revenue by 2028,” the announcement added.
Owens & Minor is a Fortune 500 global health-care company that provides essential products and services to support patient care from hospital to home. Its other health-care brands include Apria and Byram.
