Apria Inc up 25% after signing a definitive agreement with Owens & Minor

Apria Inc (NASDAQ: APR) spiked 25% after it announced that it had entered a definitive agreement with Owens & Minor (NYSE: OMI) whereby Owens would acquire its common stock shares for $37.50 per share representing a total equity value of roughly $1.45 billion. 

The strategic rationale of the deal

The deal is set to strengthen the company’s total value proposition, allowing it to better serve the patient during the whole journey and will help make Owens & Minor a leading player in the home healthcare space. The deal will build upon Owen’s robust capabilities in healthcare, product, and manufacturing services.

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The agreement will also help diversify the revenue base and strengthen overall growth. It will do this by expanding the company’s presence in the rapidly growing home healthcare sector. 

The definitive agreement between these two companies will help broaden Patient Direct product offering by combining Owens & Minor’s strength in wound, incontinences, ostomy and diabetes care with Apria’s strength in obstructive sleep apnea, home respiratory, and negative pressure wound care. 

The deal will also boost the attractiveness to patients, providers and payors alike because of the broader product offering combined with the company’s footprint, geographic, scale and delivery model. It will also create a future growth platform within a growing but highly-fragmented healthcare space. 

Top management comments 

Owens & Minor’s Chief Executive Officer, Edward Pesicka, said:

“I’m very excited about the acquisition of Apria, which will strengthen our total company value proposition.” 

He claimed that combining these two complementary businesses will enable them to better services in the home healthcare space. 

April’s Chief Executive Officer, Dan Starck, claimed that he was enthusiastic and energized to join the Owens & Minor outfit. The CEO said:

“Both companies share cultures fueled by a commitment to customers, patients, teammates and the communities we serve. We look forward to joining together and delivering the highest quality healthcare solutions to our customers.”

Details of agreement

Apria will give its common stock shares to Owens & Minor for roughly $37.50 per share, representing a total equity value of roughly $1.45 billion. The set price per share will also represent a 24% and 26% premium over the company’s 30-day volume-weighted average price and closing share price as of 7 Jan 2022, respectively.