By Carl O'Donnell
(Reuters) - Owens & Minor Inc is exploring a sale of the company, people familiar with the matter said on Wednesday, as the U.S. medical supplies distributor seeks to recover from a string of disappointing earnings.
The Richmond, Virginia-based company's shares tumbled as much as 20 percent on Wednesday, the day after it reported fourth-quarter earnings that missed analysts' expectations amid fierce price competition in its hospital supplies business.
Owens & Minor, which has a market capitalization of $420 million, is working with investment banks to explore a sale, said the sources, who asked not to be named because the matter is confidential. They cautioned there is no guarantee that the talks will result in a deal.
Owens & Minor did not respond to a request for comment.
The company provides supply chain management to healthcare services vendors and manufacturers of healthcare products, supplies and devices.
Owens & Minor Chairman Robert Sledd told analysts on the company's earnings call earlier on Wednesday that the company experienced a "perfect storm" in 2018, with some issues self-inflicted and others outside its control. These challenges included supply disruptions caused by mergers and acquisitions of manufacturers, and a spate of natural disasters, Sledd said.
The company's goal is to have these service issues behind it by midyear, said Sledd, who was named chairman and interim chief executive in November.
The company on Wednesday also announced a new CEO, Ed Pesicka, the former chief commercial officer of Thermo Fisher Scientific Inc, who will start on March 4.
Last year, Owens & Minor acquired the surgical and infection prevention business of Halyard Health, which has since changed its name to Avanos Medical Inc, for $710 million.
The deal helped it move into new markets, expand its sales team, and build out its portfolio of medical products, but also added substantially to its debt load, which exceeded $1.65 billion as of the end of December.
In 2017, Owens & Minor acquired Byram Healthcare, a medical supply distributor that delivers directly to patients and home health agencies, for around $380 million.
(Reporting by Carl O'Donnell in New York; Editing by David Gregorio and Leslie Adler)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Feb 21, 2019 02:05:29 IST