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Halyard Health, Inc. announces it has entered into a definitive agreement with Owens & Minor, Inc. to sell its Surgical and Infection Prevention (S&IP) business for $710 million. S&IP provides healthcare supplies and solutions that target the prevention of healthcare-associated infections.
The divestiture of the S&IP business accelerates Halyard's transformation into a pure-play medical devices business, with market leading positions in its core franchises of pain management and chronic care. As a growth-oriented business with a singular focus on devices, the company will be well positioned to succeed in its higher growth and higher margin categories. Halyard will benefit from a more simplified structure, enhanced management focus and significant firepower to invest in growth. The company will pursue a dual-track growth strategy through R&D and M&A, with a focus on maintaining and extending its leadership positions in its core franchises and expanding into attractive adjacencies.
"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," stated Joe Woody, Halyard chief executive officer. "The S&IP business and its employees will have an exciting future as part of Owens & Minor - an ideal buyer with strong expertise in marketing and distributing these products in our major markets."
"This divestiture will begin the next chapter for our company, one that is defined by a high-performance culture focused on developing innovative solutions for our customers and addressing our industry's most pressing healthcare needs," Woody concluded.
"We have enjoyed a strong relationship with Halyard as one of their largest customers," said P. Cody Phipps, chairman, president & chief executive officer of Owens & Minor. "This transaction is value creating, and we look forward to welcoming Halyard's talented teammates and global capabilities to the Owens & Minor family."
The purchase price of $710 million also includes the Halyard Health brand and the company's current information technology platform. The company has initiated a rebranding process and development of a new information technology platform.
Halyard's remaining business is expected to undergo a phased restructuring to address dis-synergies and corporate costs associated with the divestiture. The company expects these dis-synergies to be eliminated through a multi-year transformation.
Halyard will provide information technology and other transition services to Owens & Minor for at least one year after closing as they integrate the S&IP business into their ownership. Transition services will also be provided by Owens & Minor to Halyard.