Invacare (IVC) to Sell Medical Supplies Unit in $150M Deal; Adjusts Outlook
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Price: $14.56 +0.62%
Revenue Growth %: -22.1%
Financial Fact:
Cost of products sold: 241.84M
Today's EPS Names:
LBIX, ESEA, ISS, More
Revenue Growth %: -22.1%
Financial Fact:
Cost of products sold: 241.84M
Today's EPS Names:
LBIX, ESEA, ISS, More
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Invacare Corporation (NYSE: IVC) and AssuraMed announced today that they have signed a definitive agreement under which Invacare will sell Invacare Supply Group (ISG), its domestic medical supplies business, to AssuraMed for $150 million, subject to certain closing adjustments. This divestiture is consistent with Invacare's focus on its globalization strategy to harmonize core global product lines and reduce complexity within its business. For AssuraMed, a leader in wholesale and home-delivered medical supplies across the United States, this strategic purchase allows the company to strengthen its position as a leader in the medical supplies industry.
The transaction, which is expected to close in early 2013, is subject to regulatory approval and other customary closing conditions.
Subject to certain closing adjustments and any restructuring charges, Invacare preliminarily estimates that it will realize net proceeds from the sale of the ISG business of approximately $140 million, net of tax and expenses. In the near term, Invacare intends to use the proceeds to strengthen its balance sheet and reduce debt outstanding under its revolving credit facility. As previously disclosed by Invacare, net sales for the ISG business were approximately $299.5 million for 2011 and $246.4 million for the first nine months of 2012. Earnings before income taxes were approximately $8.0 million for 2011 and $5.1 million for the first nine months of 2012.
While expected to be initially dilutive, this divestiture is consistent with Invacare's globalization strategy. As Invacare continues to make progress on the remediation of its quality systems related to the previously announced consent decree at its corporate and wheelchair manufacturing facilities in Elyria, Ohio, it looks forward to redeploying its engineering talent on new global product development. Global product platforms are central to eliminating redundant activities, increasing agility, driving innovation, leveraging supply chain capabilities, delivering profitable growth and reducing complexities both internally and externally for its customers. Once consent decree remediation is completed, Invacare will be better positioned to accelerate new product development with selective acquisitions.
Jefferies & Company, Inc. acted as financial adviser and Calfee, Halter & Griswold LLP acted as legal adviser to Invacare Corporation in the transaction.
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The transaction, which is expected to close in early 2013, is subject to regulatory approval and other customary closing conditions.
Subject to certain closing adjustments and any restructuring charges, Invacare preliminarily estimates that it will realize net proceeds from the sale of the ISG business of approximately $140 million, net of tax and expenses. In the near term, Invacare intends to use the proceeds to strengthen its balance sheet and reduce debt outstanding under its revolving credit facility. As previously disclosed by Invacare, net sales for the ISG business were approximately $299.5 million for 2011 and $246.4 million for the first nine months of 2012. Earnings before income taxes were approximately $8.0 million for 2011 and $5.1 million for the first nine months of 2012.
While expected to be initially dilutive, this divestiture is consistent with Invacare's globalization strategy. As Invacare continues to make progress on the remediation of its quality systems related to the previously announced consent decree at its corporate and wheelchair manufacturing facilities in Elyria, Ohio, it looks forward to redeploying its engineering talent on new global product development. Global product platforms are central to eliminating redundant activities, increasing agility, driving innovation, leveraging supply chain capabilities, delivering profitable growth and reducing complexities both internally and externally for its customers. Once consent decree remediation is completed, Invacare will be better positioned to accelerate new product development with selective acquisitions.
Jefferies & Company, Inc. acted as financial adviser and Calfee, Halter & Griswold LLP acted as legal adviser to Invacare Corporation in the transaction.
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