Owens & Minor Announces Strategic Divestiture of Products & Healthcare Services Segment to Platinum Equity, Accelerating Transformation into Pure-Play Home-Based Care Leader
Richmond, VA – Owens & Minor, Inc. (NYSE: OMI), a global healthcare solutions company, today announced it has entered into a definitive agreement to sell its Products & Healthcare Services (P&HS) segment to global investment firm Platinum Equity for $375 million in cash, along with a retained equity stake in the divested business. The transaction marks a pivotal milestone in Owens & Minor’s multi-year strategic transformation, as the company sharpens its focus on becoming a leading, pure-play provider in the rapidly expanding home-based care market.
The decision to divest the P&HS segment aligns with Owens & Minor’s long-term vision of streamlining its operations, enhancing shareholder value, and capitalizing on high-growth opportunities in patient-centric care delivery. Over the past several years, the company has systematically repositioned its portfolio to emphasize its Patient Direct business—a segment that delivers essential medical products and services directly to patients in their homes. This strategic pivot reflects broader industry trends, including the shift from institutional to home-based care, rising consumer demand for convenience and personalized health solutions, and favorable reimbursement dynamics supporting at-home care models.
Strategic Rationale: Focused Growth in High-Value Home-Based Care
Edward A. Pesicka, President and Chief Executive Officer of Owens & Minor, emphasized that the sale of the P&HS segment is a natural evolution of the company’s transformation journey. “Today’s announcement represents another critical step forward in the strategic transformation of Owens & Minor into a leading, pure-play home-based care platform,” Pesicka stated. “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.”
Pesicka highlighted that dedicating the company’s full resources—capital, talent, and operational focus—to the Patient Direct segment will unlock significant long-term value. “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,” he added. “The ability to dedicate our resources to the more profitable part of the legacy business will be value-enhancing for many years to come.”
The Patient Direct segment has demonstrated strong performance in recent quarters, benefiting from structural tailwinds such as an aging population, the rise of chronic disease management at home, and increased adoption of telehealth and remote monitoring technologies. By shedding the lower-margin, capital-intensive P&HS operations—which include distribution, logistics, and supply chain services for hospitals and health systems—Owens & Minor aims to operate with greater agility, improved margins, and a clearer investment thesis for the capital markets.
Platinum Equity: A Strategic Steward for P&HS
Owens & Minor expressed confidence in Platinum Equity’s ability to nurture and grow the P&HS business post-divestiture. Pesicka noted, “Platinum Equity is the perfect home for the Products & Healthcare Services business, and their commitment to building on the customer-centric legacy of the business and to strategically invest to stay at the forefront of the evolving healthcare market will serve all stakeholders very well long into the future.”
Platinum Equity, a Los Angeles-based private equity firm with over 30 years of experience in complex corporate carve-outs and operational turnarounds, has a strong track record in the healthcare and supply chain sectors. The firm has successfully acquired and scaled numerous businesses previously embedded within larger corporate structures, often enhancing their competitiveness through strategic investments, operational improvements, and targeted growth initiatives.
Jacob Kotzubei, Co-President of Platinum Equity, affirmed the firm’s enthusiasm for the acquisition. “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,” Kotzubei said. “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.”
Matthew Louie, Managing Director at Platinum Equity, echoed this sentiment, emphasizing the standalone potential of the P&HS business. “We are committed to growing the P&HS business and have strong conviction in its potential as a standalone company,” Louie stated. “We look forward to working with the team to support its continued growth and operational transformation.”
Under Platinum Equity’s ownership, the P&HS segment is expected to benefit from enhanced strategic focus, modernized infrastructure, and expanded service offerings tailored to the evolving needs of hospitals, clinics, and other healthcare providers. The retained equity stake by Owens & Minor also aligns the interests of both parties, ensuring continued collaboration during the transition and beyond.
Transaction Details and Financial Impact
The transaction, valued at $375 million in cash plus a minority equity interest retained by Owens & Minor, is expected to close in the second half of 2024, subject to customary regulatory approvals and closing conditions. Upon completion, Owens & Minor intends to use the proceeds to strengthen its balance sheet, invest in growth initiatives within its Patient Direct segment, and return capital to shareholders.
The divestiture is projected to significantly improve Owens & Minor’s financial profile, including higher adjusted EBITDA margins, reduced working capital requirements, and a more resilient earnings stream. Analysts anticipate that the market will reward the company’s streamlined focus with a re-rating of its valuation multiples, bringing it more in line with specialized home healthcare peers.
