The acquisition will expand Owens & Minor’s Patient Direct segment and broaden its footprint in the home medical equipment sector.
RT’s Three Key Takeaways:
- Acquisition Details: Owens & Minor Inc has agreed to acquire Rotech Healthcare, a home-based care business, for $1.36 billion in cash, aiming to expand its Patient Direct segment and strengthen its presence in the home medical equipment market.
- Company Impact: Rotech Healthcare operates in 46 states with over 4,200 employees, generating approximately $750 million in revenue and an EBITDA margin of nearly 30% in 2023.
- Strategic Rationale: Owens and Minor says the acquisition will enhance its product offerings in respiratory, sleep apnea, diabetes, and wound care, support a combined customer base, and improve service for patients with chronic conditions.
Global healthcare solutions company Owens & Minor Inc has entered into an agreement to acquire Rotech Healthcare Holdings Inc, a privately held home-based care business headquartered in Orlando, Fla, in a $1.36 billion cash deal.
Rotech, a provider of home medical equipment in the United States, has over 4,200 employees and provides products and services in 46 states through approximately 325 operating locations. In 2023, Rotech generated approximately $750 million in revenue 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,” says Edward A. Pesicka, president and chief executive officer of Owens & Minor, in a release.
According to Owens & Minor, the strategic rationale for the acquisition includes:
- Strengthens Patient Direct product offerings through expansion across a complementary portfolio including respiratory, sleep apnea, diabetes, and wound care, while providing access to the durable medical equipment market.
- Supports combined customer base, allowing Owens & Minor to better serve providers and payors across an integrated national network.
- Enhances service to patients through the combined suite of complementary product offerings, improving care for patients with chronic conditions in large and fragmented markets.
“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,” says Robin Menchen, president and chief executive officer of Rotech, in a release.
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