Owens & Minor Aborts Rotech Acquisition Due to Regulatory Concerns.

Owens & Minor has canceled its $1.36B acquisition of Rotech Healthcare Holdings due to regulatory issues. The company will redeem $1B in debt and has agreed to pay a termination fee of $75M. Owens & Minor's CEO, Greg Mason, stated that the company is committed to its long-term growth strategy and will continue to explore opportunities to strengthen its business.

Richmond, Va. - Owens & Minor, Inc. (NYSE: OMI), a global healthcare solutions company, has terminated its planned acquisition of Rotech Healthcare Holdings Inc. The termination, effective June 3, 2025, follows extensive regulatory challenges [3]. The deal, valued at $1.36 billion, was originally announced in 2023 and aimed to expand Owens & Minor's Patient Direct business, which caters to home-based care.

Owens & Minor will pay a $80 million termination fee to Rotech Healthcare Holdings, as outlined in the merger agreement [1]. Additionally, the company will redeem $1 billion in notes issued in April 2025 as part of the unwinding process [3]. This adds to Owens & Minor's existing financial obligations, with total debt standing at $2.27 billion as of the latest quarter [3].

Edward A. Pesicka, President & Chief Executive Officer of Owens & Minor, stated, "While we believe there would have been ample benefits to patients, payors, and providers by adding Rotech to our Patient Direct business, the path to obtain regulatory clearance for this merger proved unviable in terms of time, expense, and opportunity" [1].

Despite the setback, Owens & Minor remains committed to its long-term growth strategy. The company plans to continue strengthening its Patient Direct business and exploring opportunities to enhance its balance sheet through improved cash flow generation and deleveraging [3]. Additionally, Owens & Minor is actively engaged in discussions regarding the potential sale of its Products and Healthcare Services segment [1, 3].

The home-based care market, where Owens & Minor has a strong presence, is expanding, and the company is committed to serving patients with chronic conditions. Pesicka expressed gratitude to the teams at Owens & Minor and Rotech for their cooperation and efforts over the past months and emphasized the company’s outlook for profitable growth in the future [3].

Owens & Minor, Inc., with over 20,000 employees worldwide, has been a key player in the healthcare industry for more than a century, providing products and services from the hospital to the home through its affiliated brands.

References:
[1] https://virginiabusiness.com/owens-minor-cancels-rotech-healthcare-acquisition/
[2] https://www.gurufocus.com/news/2910876/owens-minor-omi-abandons-rotech-acquisition-due-to-regulatory-hurdles
[3] https://www.investing.com/news/company-news/owens--minor-cancels-rotech-healthcare-acquisition-93CH-4083086
[4] https://richmond.com/news/local/business/article_c3794952-0ca5-437e-b91b-548660d2f011.html