Given anticipated tax benefits of approximately $40 million from the transaction, the net purchase price is approximately $1.32 billion, representing approximately a 6.3x multiple of LTM EBITDA, excluding synergies.
Rotech provides home medical equipment in the U.S. The company has over 4,200 employees and provides products and services in 46 states through approximately 325 operating locations.
Rotech generated approximately $750 million of revenue and an EBITDA margin of nearly 30% in 2023.
The deal strengthens Owen & Minor’s Patient Direct product offerings through expansion across a complementary portfolio and accelerates the growth path for the Patient Direct segment as outlined at the December 2023 Investor Day to achieve $5 billion in revenue by 2028.
The transaction provides a significant synergy opportunity of approximately $50 million by the end of year three, with further upside potential and prospects for additional revenue synergies in the near and long term.
Owens & Minor also announced selected preliminary financial results for the second quarter of 2024, with revenue of $2.65 billion—$2.67 billion versus a consensus of $2.64 billion.
The healthcare logistics services company sees adjusted EPS of $0.32 – $0.36 compared to a consensus of $0.31.
For 2024, Owens & Minor reaffirmed its revenue outlook of $10.5 billion-$10.9 billion compared to a consensus of $10.66 billion.
The company continues to see 2024 adjusted EPS of $1.40-$1.70 versus the consensus of $1.53.
Price Action: OMI stock is up 7.38% at $16.44 at last check Tuesday.
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