Henrico County–based Owens & Minor is slimming down. The Fortune 500 healthcare logistics company said Wednesday it will sell its largest business segment — Products & Healthcare Services — to Platinum Equity for $375 million, a move that will sharply redefine its footprint and strategy.

The sale, expected to close by the end of the year, underscores Owens & Minor’s pivot toward its higher-margin Patient Direct division, which supplies home medical equipment and services directly to patients. After the divestiture, the company will effectively transform from a sprawling distributor into a streamlined home-care specialist.

Owens & Minor’s decision comes after a turbulent year for the 140-year-old company. Once a dominant player in medical supply distribution, it has struggled to maintain profitability amid industry consolidation and inflationary pressures. In June, the company abandoned a planned $1.36 billion acquisition of Rotech Healthcare Holdings, citing changing market conditions, and paid an $80 million termination fee.

Chief Executive Edward A. Pesicka framed the sale as a decisive step toward long-term growth. “Today’s announcement represents another critical step forward in transforming Owens & Minor into a leading, pure-play, home-based care platform,” Pesicka said. “The ability to dedicate our resources to the more profitable part of the business will be value-enhancing for many years to come.”

The company ranked No. 395 on the Fortune 500 list this July, but the sale will likely push it off the ranking next year, reducing its overall scale and revenue base.

The buyer, Platinum Equity, a Beverly Hills–based private equity firm founded by billionaire Tom Gores, has a long history of acquiring and revamping industrial and healthcare operations. Over the past three decades, it has invested in multiple healthcare and supply-chain businesses, including the 2002 merger of Health Care Products and Diagnostic Imaging to form SourceOne Healthcare Technologies.

“Owens & Minor has played a vital role in supporting healthcare providers and patients across the country,” Platinum Equity co-president Jacob Kotzubei said. “We are proud to invest in the future of P&HS and committed to enhancing its global capabilities.”

Under the deal, 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. The company also expects to keep more than $150 million in tax assets from the transaction.

Investors appeared wary. Owens & Minor’s stock, which opened Wednesday at $5.18, slipped nearly 10% to $4.66 by the afternoon. The company said the transaction remains subject to regulatory approval, including the Hart-Scott-Rodino Act review.

Owens & Minor has tapped Citi and Wells Fargo as financial advisers, with Kirkland & Ellis serving as legal counsel. The company plans to release third-quarter earnings on October 31, providing its first update since signaling its intent to divest the division earlier this year.

With the sale, Owens & Minor is betting its future on the growing demand for home-based healthcare — a market projected to expand as aging populations and post-pandemic trends drive care outside traditional facilities. The company’s transformation from distributor to patient-centric provider marks a bold gamble: smaller, but potentially stronger.

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