Henrico-based Owens & Minor sells products and healthcare segment for $375M

Global investment firm Platinum Equity announced Tuesday that it has agreed to a $375-million purchase of the Products and Healthcare Services segment of Glen Allen-based Owens and Minor, which will retain a 5% ownership stake in the business following the sale.

Owens and Minor's P&HS segment is a distribution platform that serves hospitals, health systems and other healthcare providers nationwide. The division is a leading supplier of medical and surgical products for the acute care market.

The move signals a major shift in Owens and Minor's operations; the company is pivoting from what had been its core function for decades to a narrower focus on serving the home-based care market through its Patient Direct platform.

Los Angeles-based Platinum Equity, founded in 1995 by Tom Gores, owns nearly 60 other businesses across a wide range of industries – including the Detroit Pistons of the NBA, golf car manufacturer Club Car, and yearbook and class ring supplier Jostens – and holds about $50 billion in assets.

Platinum Equity has a long history of acquiring and growing businesses spun off from large corporate entities. During the past three decades, the firm has acquired companies from Ball Corporation, Caterpillar, Emerson Electric, Ingersoll Rand, and Kohler, among others.

“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,” said Jacob Kotzubei, co-president of Platinum Equity. “With Platinum’s operational capabilities, we are excited about further enhancing P&HS’s global reach to deliver essential products and services when and where its customers need them.”

The transaction is expected to close near the end of the year, pending regulatory review and other customary conditions.

“Platinum Equity is the perfect home for the Products & Healthcare Services business,” said Edward A. Pesicka, president and CEO of Owens and Minor. “Their commitment to the customer-centric legacy of the business and to strategic investment will help it thrive in an evolving healthcare market.”

The acquisition aligns with favorable long-term healthcare trends, according to Platinum Equity Managing Director Matthew Louie.

“We believe the aging U.S. population and increasing demand for healthcare services will continue to drive sustainable long-term demand for medical supply distribution,” Louie said. “We are committed to growing the P&HS business and have strong conviction in its potential as a standalone company.”