Owens & Minor to sell largest business segment for $375M

Fortune 500 company Owens & Minor, based in Henrico County, announced Wednesday that it plans to sell its Products & Healthcare Services segment for $375 million to Platinum Equity, a California private equity firm.

The sale will make the corporation considerably smaller, leaving it to focus on its Patient Direct service, a profitable sector that provides home medical equipment. According to the company, the sale of the P&HS segment is expected to conclude late this year.

In July, Owens & Minor was ranked No. 395 on the Fortune 500 list, and the sale of its largest segment will likely lead to it falling off the prestigious list of the nation’s largest corporations. In June, Owens & Minor announced it backed out of a $1.36 billion deal to buy Rotech Healthcare Holdings, a Florida home-based health care business. The two companies agreed to terminate the acquisition June 3, and Owens & Minor paid a termination fee of $80 million in cash.

“Today’s announcement represents another critical step forward in the strategic transformation of Owens & Minor into a leading, pure-play, home-based care platform,” Owens & Minor President and CEO Edward A. Pesicka said in a statement Wednesday. “With the definitive agreement in place for Products & Healthcare Services, we will remain laser-focused on transforming the company into a pure-play, home-based care business that will drive even more value for our Patient Direct stakeholders.

“Going forward, we will be positioned among the leaders in a dynamic market where we will be able to capitalize on our leading brands and long-standing record of putting the patient first while delivering consistent revenue and profit growth. The ability to dedicate our resources to the more profitable part of the legacy business will be value-enhancing for many years to come.”

Platinum Equity, based in Beverly Hills, California, has regional offices worldwide and manages four private equity fund vehicles. According to Owens & Minor, the company has invested in multiple health care and supply businesses over its 30-year history. In 2002, Platinum combined Health Care Products, a former division of Royal Philips Electronics, and Diagnostic Imaging, a subsidiary of PSS World Medical, into one company, SourceOne Healthcare Technologies.

“Owens & Minor has played a vital role in supporting healthcare providers and patients across the country, and we are proud to invest in the future of P&HS,” Platinum Equity’s co-president, Jacob Kotzubei, said in a statement. “We are pleased to provide Owens & Minor a divestiture solution for P&HS and are grateful for the continued partnership. With the support of Platinum’s operational resources, we are committed to further enhancing P&HS’s global capabilities to deliver essential products and services when and where its customers need.”

In late February, during Owens & Minor’s year-end earnings call reporting 2024’s revenue, Pesicka said that the company was “actively engaged in robust discussions regarding the potential sale” of the P&HS sector, as the company viewed the home-care sector as its best long-term prospect.

Under the terms of the agreement, Owens & Minor will receive a cash payment of $375 million at the sale’s close, subject to customary adjustments for working capital, net debt and transaction expenses, and the company will retain a 5% interest in the P&HS sector, as well as a portion of divestiture proceeds if Platinum Equity chooses to sell the business in the future. Owens & Minor also will retain certain tax assets that exceed $150 million.

The transaction is subject to regulatory approvals, including the Hart Scott Rodino Act. Citi and Wells Fargo are acting as financial advisers to Owens & Minor, while Kirkland & Ellis is its legal adviser. On Oct. 31, Owens & Minor is expected to release its results for the third quarter of 2025.

The company’s stock fell from a height of $5.18 per share Wednesday morning to $4.66 in the afternoon.