Saying it allows for the company to become a more focused on medical devices, Halyard Health announced this week it is selling off its business unit specializing in surgical products and infection prevention. The buyer is Owens & Minor, which is offering $710 million cash for that chunk of Halyard’s operations.
“This transaction represents a natural evolution and is a milestone moment for both of our businesses. It accelerates our transformation to becoming a pure-play medical devices company and provides significant resources to accelerate our growth,” Joe Woody, Halyard’s CEO, said in a statement.
The purchase includes the Halyard Health brand and the manufacturer’s current information technology platform. Halyard announced intentions to undergo rebranding for remaining business units, which cover areas such as respiratory health and pain management.
For Owens & Minor, the acquisition is part of an ongoing attempt to broaden their offerings in the healthcare field. Earlier this year, the company purchased medical supply distribution company Byram Healthcare.
PURPLE NITRILE* Exam Gloves are included in the Infection Prevention business unit of Halyard Health. (Image credit: Halyard Health)
With the purchase of Halyard Health, Owens & Minor gets ownership of well-known products in the surgical space, such as the AERO SERIES* of gowns and and an extensive line of sterilization wraps.
“Ultimately, our conclusion was that we needed to strengthen and diversify our business model,” P. Cody Phipps, chairman, president and CEO of Owens & Minor, explained during a conference call with investors this week, according to the Richmond Times-Dispatch.
“That is why we really like the acquisition of the Halyard … business, because what it brings to us now — in addition to all the distribution and logistics solutions we bring — is a much stronger and much more compelling product portfolio. We think that is going to allow us to compete more effectively,” he added.
The deal needs to go through the usual regulatory approvals, but there are no red flags at this point. The purchase is expected to formally close early in 2018.
