Owens & Minor To Buy Medical Action Industries For $13.80/Shr Cash - Quick Facts

(RTTNews) - Healthcare logistics firm Owens & Minor Inc. (OMI) has inked a definitive deal to acquire all outstanding shares of Medical Action Industries Inc. (MDCI), a producer of custom procedure trays and minor procedure kits, for $13.80 per share cash, representing a total transaction value of about $208 million, including assumed debt, net of cash.

Owens & Minor expects the transaction to be accretive to non-GAAP earnings per share in 2015 and beyond. Owens & Minor estimates annual pre-tax cost synergies of $10 million - $12 million by the end of calendar year 2016, exclusive of potential revenue synergies. Aside from transaction-related costs, which would be reported as acquisition-related and exit and realignment charges, the impact to Owens & Minor 's 2014 non-GAAP per share earnings is not expected to be significant, as it would be limited primarily to the fourth quarter of 2014.

Following the deal closure, Owens & Minor would significantly advance its strategy of Connecting the World of Medical Products to the Point of Care by widening its service offering to provider and manufacturer customers.

The transaction, which has been approved by the boards of directors of both companies following an auction process, is expected to close in the fourth quarter of 2014. The total transaction, including the assumption of Medical Action's remaining outstanding debt net of cash (including the net proceeds of the June 2, 2014 sale of Medical Action's patient care business), is worth nearly $208 million.

Medical Action generated net sales from continuing operations of $287.8 million for the year ended March 31, 2014, of which nearly 45% represented sales to Owens & Minor.