Owens & Minor ends $1.36B deal to buy home-based care business

Glen Allen-based Fortune 500 health care logistics and supply company Owens & Minor has backed out of a $1.36 billion deal to buy Rotech Healthcare Holdings, a Florida home-based care business.

Owens & Minor and Rotech Healthcare Holdings mutually agreed to terminate the deal June 3, according to a filing with the U.S. Securities and Exchange Commission that also noted the Henrico County-based company paid a termination fee of $80 million in cash.

“For many months, our teammates, along with the Rotech team, have worked tirelessly in cooperation with the Federal Trade Commission to close this transaction, and while we believe there would have been ample benefits to patients, payors and providers by adding Rotech to our Patient Direct business, the path to obtain regulatory clearance for this merger proved unviable in terms of time, expense and opportunity,” Edward A. Pesicka, Owens & Minor’s president and CEO, said in a statement.

The company’s patient direct sector delivers medical supplies to patients and home health agencies.

News of the failed deal follows a February announcement that Owens & Minor was “actively engaged in robust discussions” about the sale of its products and health care services segment.

In 2023, Rotech, which provides home medical equipment like sleep apnea therapy devices, generated about $750 million in revenue, according to Owens & Minor.

When announcing the deal last summer, Pesicka stated that the company fits well with its existing patient direct sector and that the acquisition would align with a strategy announced in 2023 to expand in the home-based care space.

With Thursday’s announcement, Pesicka noted that Owens & Minor continues to work with interested parties on the sale of the products and health care services segment, but that “in the meantime, we will continue to actively work to strengthen that business and tap into its significant upside.”

“We are confident in our strategy and will continue to focus our efforts on growing our Patient Direct business while remaining committed to strengthening our balance sheet through the use of improved cash flow generation for deleveraging,” Pesicka added. “The home-based care market is a dynamic, growing market, and we are extremely well positioned to help those with chronic conditions get the care and service they need and deserve.”

In September 2024, Jonathan Leon succeeded Alexander Bruni as chief financial officer, following Owens & Minor’s June 2024 report in a securities filing that Bruni resigned at the company’s request.

Owens & Minor reported revenue of about $2.6 billion in the first quarter of 2025, roughly flat over the same quarter in the previous year. The company had $1.95 billion in debt that quarter.

In February, Owens & Minor announced it had repaid $647 million in debt over two years.

Last year, the Virginia Department of Transportation purchased the Mechanicsville headquarters of Owens & Minor for $33.5 million. Owens & Minor moved to Henrico’s Innsbrook Corporate Center.