Owens & Minor Sells Largest Business Unit in Strategic Pivot to Home Healthcare

Henrico County-based Owens & Minor is slimming down as the Fortune 500 healthcare logistics company announced it will sell its largest business segment, Products & Healthcare Services, to Platinum Equity for $375 million. This strategic move will sharply redefine the company's footprint and represents a significant pivot toward its higher-margin Patient Direct division, which supplies home medical equipment and services directly to patients. The sale, expected to close by the end of the year, will effectively transform Owens & Minor from a sprawling distributor into a streamlined home-care specialist.

The decision comes after a turbulent year for the 140-year-old company, which 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, stating that dedicating resources to the more profitable part of the business will be value-enhancing for many years to come.

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. Platinum Equity co-president Jacob Kotzubei expressed pride in investing in the future of P&HS and commitment to enhancing its global capabilities. Under the deal structure, 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.

Investors appeared wary of the strategic shift, with Owens & Minor's stock slipping nearly 10% to $4.66 by Wednesday afternoon after opening at $5.18. 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 this 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 that positions it to capitalize on the shifting healthcare landscape, potentially emerging as a stronger, more focused organization despite reduced scale and revenue base that will likely push it off the Fortune 500 ranking next year.