Owens & Minor to buy Rotech 

RICHMOND, Va. - Owens & Minor has entered into a definitive agreement to buy Rotech Healthcare for $1.36 billion in cash. 

Given the anticipated tax benefits from the transaction of about $40 million, the net purchase price is about $1.32 billion, representing 6.3x multiple of LTM EBITDA, excluding synergies. 

"Rotech squarely fits into our existing Patient Direct segment and directly aligns with the strategy we outlined last December during our Investor Day, supporting our expansion in the very large and fast-growing home-based care space,” said Edward A. Pesicka, president & CEO of Owens & Minor. “We are excited to acquire a high-quality company like Rotech, an opportunity that doesn’t come along very often, and I look forward to welcoming the Rotech teammates into the Owens & Minor family.” 

Rotech has more than 4,200 employees and provides products and services in 46 states through about 325 operating locations. Rotech generated about $750 million of revenue and an EBITDA margin of nearly 30% in 2023. 

Owens & Minor says Rotech: 

• Strengthens Patient Direct product offerings through expansion across a complementary portfolio, including respiratory, sleep apnea, diabetes and wound care, and provides access to DME market. 

• Supports combined customer base allowing Owens & Minor to better serve providers and payers across an integrated national network. 

• Enables Owens & Minor to more comprehensively serve patients through the combined suite of complementary product offerings and improved service for patients with chronic conditions in large and fragmented markets. 

• Provides significant synergy opportunity of approximately $50 million by the end of year three, with further upside potential, as well as prospect for additional revenue synergies in both the near and long term. 

• 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 deal was unanimously approved by the board of directors of each company. 

Citi acted as exclusive financial advisor to Owens & Minor in connection with this acquisition. Owens & Minor’s legal advisor is Kirkland & Ellis LLP. 

Jefferies LLC acted as exclusive financial advisor to Rotech in connection with the acquisition. Rotech’s legal advisor is Paul, Weiss, Rifkind, Wharton & Garrison LLP. 

• Owens & Minor has been methodically building its Patient Direct business, acquiring Apria Healthcare in 2022 and Byram Healthcare in 2017. 

• Last year, Rotech was rumored to be exploring a sale. 

• In February, Rotech CEO Tim Pigg transitioned to executive chairman of the board and the company named Robin Menchen as his replacement.