Owens & Minor Sells Largest Business Unit in Strategic Shift to Home Healthcare

Healthcare logistics company Owens & Minor announced Wednesday it will sell its largest business segment to private equity firm Platinum Equity for $375 million, fundamentally reshaping the Fortune 500 company's strategic direction. The sale of the Products & Healthcare Services division represents a decisive pivot toward the company's higher-margin Patient Direct business, which supplies home medical equipment and services directly to patients.

The transaction, expected to close by year-end, will transform Owens & Minor from a sprawling medical supply distributor into a streamlined home-care specialist. Chief Executive Edward A. Pesicka described the move as "another critical step forward in transforming Owens & Minor into a leading, pure-play, home-based care platform." The decision follows a challenging period for the 140-year-old company, which has struggled with profitability amid industry consolidation and recently abandoned a planned $1.36 billion acquisition of Rotech Healthcare Holdings while paying an $80 million termination fee.

Platinum Equity, the Beverly Hills-based private equity firm founded by billionaire Tom Gores, brings extensive experience in healthcare acquisitions, including the 2002 merger that formed SourceOne Healthcare Technologies. Platinum Equity co-president Jacob Kotzubei stated, "We are proud to invest in the future of P&HS and committed to enhancing its global capabilities." The deal structure provides Owens & Minor with $375 million in cash at closing, a 5% equity interest in the divested business, potential additional proceeds from future sales, and retention of more than $150 million in tax assets.

Investors reacted cautiously to the announcement, with Owens & Minor's stock declining nearly 10% to $4.66 during Wednesday trading. The company has engaged Citi and Wells Fargo as financial advisers and Kirkland & Ellis as legal counsel for the transaction, which remains subject to regulatory approval including Hart-Scott-Rodino Act review. The strategic shift positions Owens & Minor to capitalize on the growing home-based healthcare market, projected to expand as aging populations and post-pandemic trends drive care outside traditional facilities. The company plans to provide further details during its third-quarter earnings release on October 31.