A distributor of medical and surgical supplies to the acute-care market, a healthcare supply-chain management company and a national direct-to-consumer supplier of testing and monitoring supplies for diabetics.
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Owens and Minor Inc is a healthcare supply chain management company, distributing medical and surgical supplies to health care providers like acute care hospitals, clinics, nursing homes, physicians offices, rehabilitation facilities and surgery centers. Its product portfolio encompasses goods such as disposable gloves, dressings, endoscopic products, needles and syringes and various other goods. Apart from these, it also serves customers nationwide with diabetes testing supplies primarily blood glucose monitors and test strips, along with products for certain other chronic disease categories.
The overall healthcare market has been characterized by the consolidation of healthcare providers into larger and more sophisticated entities seeking to lower costs. The recent acquisition of acute-care medical and surgical supply distribution business of McKesson Medical-Surgical, is a good strategic fit that should help earnings growth. This acquisition helps the company to achieve synergies related to technology, infrastructure and distribution network. With the deal completed, Owens and Minor is the top player in the industry with market share of over 40%. The management expects that this acquisition would help them to record in excess of $900 million in incremental revenues.
The US hospital supply market is above $ 35 billion, which is dominated by direct manufacturer and third party distribution in equal proportions. Medical and surgical distribution is maturing from a commoditized function to a more business process and supply chain solution industries.
The management has provided a very bright picture for 2007 and expects revenues to grow in the range of 15%-20% and earnings by 55%-63%. Shares of Owens and Minor are expected to move northwards, with expanded offerings in the value added services such as third party logistics.