Owens & Minor Sells Largest Unit for $375M in Home-Care Pivot

Henrico County-based healthcare logistics giant Owens & Minor is undergoing a dramatic transformation by selling its largest business segment, Products & Healthcare Services, to private equity firm Platinum Equity for $375 million. This strategic divestiture marks a fundamental shift for the Fortune 500 company as it pivots away from traditional medical supply distribution toward focusing exclusively on its higher-margin Patient Direct division, which supplies home medical equipment and services directly to patients. The move effectively redefines Owens & Minor from a sprawling distributor into a streamlined home-care specialist, with CEO Edward A. Pesicka describing it as "another critical step forward in transforming Owens & Minor into a leading, pure-play, home-based care platform."

The transaction comes after a challenging period for the 140-year-old company, which recently abandoned a planned $1.36 billion acquisition of Rotech Healthcare Holdings and paid an $80 million termination fee due to changing market conditions. Platinum Equity, the Beverly Hills-based private equity firm founded by billionaire Tom Gores, brings extensive experience in healthcare acquisitions, having previously invested in multiple healthcare and supply-chain businesses. Under the deal terms, Owens & Minor will receive $375 million in cash at closing, retain a 5% equity interest in the divested business, and could receive additional proceeds if Platinum later sells the division, while also keeping more than $150 million in tax assets from the transaction.

Despite the strategic rationale, investors reacted cautiously, with Owens & Minor's stock dropping nearly 10% following the announcement. 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. With this bold move, Owens & Minor is betting its future on the growing demand for home-based healthcare, a market projected to expand significantly as aging populations and post-pandemic trends drive more care outside traditional facilities. The transformation represents a calculated gamble that becoming smaller and more focused will ultimately make the company stronger in the evolving healthcare landscape.