Healthcare Industry News: McKesson
News Release - March 28, 2007
Owens & Minor Completes Transition of Acquired Acute-Care Distribution Business
RICHMOND, Va.--(HSMN NewsFeed)--Owens & Minor (NYSE: OMI ) today announced that it has completed the transition of the acute-care distribution business acquired from McKesson Medical-Surgical Inc., a business unit of McKesson Corporation, on September 30, 2006. Immediately after the close of the transaction, Owens & Minor and McKesson launched a cooperative, six-month transition effort designed to achieve an orderly and rapid conversion of the customer base and transfer of inventory to Owens & Minor by the end of March 2007. In the approximately $169 million transaction, Owens & Minor acquired certain assets, including net inventory valued as of the closing date at approximately $122 million, customer contracts, and 10 leased warehouse facilities."We are very proud of our teammates, especially those assigned to the transition team, for achieving our aggressive timetable for this large-scale conversion," said Craig R. Smith, president & chief executive officer of Owens & Minor. "Our teams are working to fine tune this new business so that we achieve additional benefits from greater productivity and efficiency in our distribution network this year. The cooperative conversion effort with McKesson proved to be a win-win for all concerned."
As previously disclosed, the company continues to expect that the net dilutive effect of the McKesson transition in the first quarter of 2007 will be in a range $9 million to $12 million. Owens & Minor continues to expect that the transaction will be accretive in 2007, with acceleration of earnings growth in the second half of the year. The company will provide additional information concerning the impact of the acquired business when it releases first quarter 2007 financial results on April 18, 2007.
About Owens & Minor, Inc., a FORTUNE 500 company headquartered in Richmond, Virginia, is the leading distributor of national name-brand medical and surgical supplies and a healthcare supply chain management company. With a diverse product and service offering and distribution centers throughout the United States, the company serves hospitals, integrated healthcare systems, alternate care locations, group purchasing organizations, the federal government and consumers. Owens & Minor provides technology and consulting programs that enable healthcare providers to maximize efficiency and cost-effectiveness in materials purchasing, improve inventory management and streamline logistics across the entire medical supply chain--from origin of product to patient bedside. The company also has established itself as a leader in the development and use of technology. For news releases, or for more information about Owens & Minor, visit the company Web site at www.owens-minor.com.
Safe Harbor Statement
Except for the historical information contained herein, the matters discussed in this press release may constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These include the rate at which new business can be converted to the company, intense competitive pressures within the industry, the success of the company's strategic initiatives, changes in customer order patterns, pricing pressures, changes in government funding to hospitals and other healthcare providers, loss of major customers, Medicare reimbursement rates and other factors discussed from time to time in the reports filed by the company with the Securities and Exchange Commission. The company assumes no obligation to update information contained in this release.
Source: Owens & Minor
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