Owens & Minor agrees to acquire Medical Action Industries for $208 million

Richmond-based Owens & Minor announced Wednesday it has agreed to acquire Medical Action Industries Inc. for about $208 million.

Brentwood, N.Y.-based Medical Action Industries Inc. makes custom procedure trays and minor procedure kits. Owens & Minor is a heal

th care logistics company that provides services across the spectrum of medical products from disposable medical supplies to devices and implants. The Fortune 500 company’s annual revenues exceed $9 billion. 
Owens & Minor will acquire all outstanding shares of Medical Action for $13.80 per share in cash. Medical Action reported $287.8 million in net sales from continuing operations for the fiscal year that ended March 31, of which approximately 45 percent represented sales to Owens & Minor.

“The acquisition of Medical Action is consistent with our strategic focus and a natural extension of Owens & Minor’s core capabilities as we look to broaden our service offering,” Craig R. Smith, chairman and CEO of Owens & Minor, said in a statement. “It meets the needs of both our provider and manufacturer customers by providing them a more complete and cost-effective solution for the delivery of procedure-specific product kits. With attractive margins and a strong competitive position, we expect this transaction to create value for shareholders and establish a scalable platform for future growth.”

Owens & Minor said it plans to finance the transaction with existing cash balances and available borrowings under its revolving credit facility.
The transaction has been approved by the boards of directors of both companies and is subject to customary closing conditions. The deal is expected to close in the fourth quarter of 2014.