OWENS & MINOR REVENUES WILL APPROACH $ 1 BIL
OWENS & MINOR REVENUES WILL APPROACH $ 1 BIL. in 1989 with the planned expansion of its medical/surgical supply operation into a $ 750 mil.-plus business. The Richmond, Va.-based wholesaler announced May 2 that it signed a definitive agreement to acquire National Healthcare and Hospital Supply, which has annualized sales of over $ 250 mil. The acquisition will boost by 50% Owens & Minor's existing medical/surgical business (1988 sales of $ 500.5 mil.). Combined with Owens & Minor's $ 231.1 mil. wholesale drug business, the firm is headed toward the $ 1 bil. mark in 1989. The transaction is expected to close at the end of May, subject to regulatory approval. Privately-owned National Healthcare operates eight medical/surgical supply distribution centers in the western states. The company is headquartered in Orange, California. Owens & Minor has 22 distribution centers (19 medical/surgical; four wholesale drug) located primarily east of the Mississippi. Commenting on the agreement, Owens & Minor President Gil Minor said the acquisition "will advance our efforts to deliver greater efficiencies to the medical supply market. We are delighted with the prospect of increasing our market coverage." The purchase will put Owens & Minor in second place behind Baxter in the hospital medical/surgical supply industry, but will not extend Owens & Minor's evergreen contract with the Veterans Administration. National Healthcare will receive $ 3.5 mil. in debentures convertible into 257,000 shares of Owens & Minor stock, $ 11.5 mil. in eight-year notes, plus an earn-out consideration. Aside from the earn-out, which is variable, the value of the transaction is roughly $ 8.6 mil.: $ 3.1 mil. based on a 12-1/8 per share price at close of trade April 28 and about $ 5.5 mil. for the notes. To manage effectively its changing corporate profile, Owens & Minor announced on April 26 a number of organizational changes. Senior VP Henry Berling will assume the title of chief operating officer, while Exec VP and Chief Operating Officer Frank Fife, 67, will remain exec VP. Berling, 46, will be responsible for all distribution center operations for Owens & Minor's four divisions: Wholesale Drug, Medical/Surgical, Vangard Labs and Harbor Medical. Hugh Gouldthorpe is the new general manager of the Wholesale Drug Division and a corporate VP. Gouldthorpe, 50, joined Owens & Minor in 1986 from Squibb. He has responsibility for the distribution centers in Richmond and Norfolk, Va. and Wilson, N.C. Owens & Minor also has a Fort Lauderdale, Fla. facility which combines wholesale drug distribution and medical/surgical products.
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