ALPHARETTA, Ga., Nov. 1, 2017 /PRNewswire/ -- Halyard
Health, Inc. (NYSE: HYH) today announced it has entered into a
definitive agreement with Owens & Minor, Inc. to sell its
Surgical and Infection Prevention ("S&IP") business for
$710 million. S&IP provides
healthcare supplies and solutions that target the prevention of
healthcare-associated infections.
The divestiture of the S&IP business accelerates Halyard's
transformation into a pure-play medical devices business, with
market leading positions in its core franchises of pain management
and chronic care. As a growth-oriented business with a singular
focus on devices, the company will be well positioned to succeed in
its higher growth and higher margin categories. Halyard will
benefit from a more simplified structure, enhanced management focus
and significant firepower to invest in growth. The company will
pursue a dual-track growth strategy through R&D and M&A,
with a focus on maintaining and extending its leadership positions
in its core franchises and expanding into attractive
adjacencies.
"This transaction represents a natural evolution and is a
milestone moment for both of our businesses. It accelerates our
transformation to becoming a pure-play medical devices company and
provides significant resources to accelerate our growth," stated
Joe Woody, Halyard chief executive
officer. "The S&IP business and its employees will have an
exciting future as part of Owens & Minor - an ideal buyer with
strong expertise in marketing and distributing these products in
our major markets."
"This divestiture will begin the next chapter for our company,
one that is defined by a high-performance culture focused on
developing innovative solutions for our customers and addressing
our industry's most pressing healthcare needs," Woody
concluded.
"We have enjoyed a strong relationship with Halyard as one of
their largest customers," said P. Cody
Phipps, chairman, president & chief executive officer of
Owens & Minor. "This transaction is value creating, and we
look forward to welcoming Halyard's talented teammates and global
capabilities to the Owens & Minor family."
Sale of the S&IP Business
The purchase price of $710 million
also includes the Halyard Health brand and the company's current
information technology platform. The company has initiated a
rebranding process and development of a new information technology
platform.
Halyard's remaining business is expected to undergo a phased
restructuring to address dis-synergies and corporate costs
associated with the divestiture. The company expects these
dis-synergies to be eliminated through a multi-year
transformation.
Halyard will provide information technology and other transition
services to Owens & Minor for at least one year after closing
as they integrate the S&IP business into their ownership.
Transition services will also be provided by Owens & Minor to
Halyard.
Use of Proceeds
Management will evaluate options for use of the proceeds, with
the objective of maximizing balance sheet flexibility for future
internal investment and M&A.
Halyard will provide more detail on the capital allocation
framework at the time of close.
Closing and Advisors
The transaction is subject to regulatory approval and other
customary closing conditions and is expected to close in first
quarter 2018. The company will continue to be headquartered in
Alpharetta, Ga.
Deutsche Bank Securities Inc. acted as financial advisors and
Alston & Bird LLP as legal advisors to Halyard in connection
with this transaction.
Third Quarter Performance and Updated Full-Year
Guidance
Halyard today separately announced its third quarter 2017
results. The earnings press release is available on the company's
website https://halyardhealth.investorroom.com.
As a result of performance year-to-date, the company is raising
its full-year adjusted diluted earnings per share outlook to
$2.03 to $2.13 from $1.85 to $2.05. The
transaction is expected to close in the first quarter 2018, and
will therefore have no impact on 2017 adjusted diluted earnings per
share guidance. The company intends to provide 2018 guidance at the
time of its fourth quarter conference call.
Conference Call Webcast
Halyard Health, Inc. will host a conference call today at
9 a.m. ET. The conference call can be
accessed live over the internet at
https://halyardhealth.investorroom.com or via telephone by
dialing 877-240-5772 in the United
States. A replay of the call will be available at
noon ET today by calling 877-344-7529
in the United States and entering
passcode 10113544. A webcast of the call will also be archived
in the Investors section on the Halyard website.
About Halyard Health, Inc.
Halyard Health Inc. (NYSE:
HYH) is a medical technology company focused on eliminating pain,
speeding recovery and preventing infection for healthcare providers
and their patients. Headquartered in Alpharetta, Georgia, Halyard is committed to
addressing some of today's most important healthcare needs, such as
reducing the use of opioids while helping patients move from
surgery to recovery and preventing healthcare-associated
infections. Halyard's business segments - Medical Devices and
Surgical and Infection Prevention (S&IP) - develop, manufacture
and market clinically superior solutions that improve medical
outcomes and business performance in more than 100 countries.
For more information, visit www.halyardhealth.com.
Forward-Looking Statements
This press release contains
information that includes or is based on "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are based on the
current plans and expectations of management and are subject to
various risks and uncertainties that could cause our actual results
to differ materially from those expressed or implied in such
statements. Forward-looking statements include all statements that
do not relate solely to historical or current facts, and can
generally be identified by the use of words such as "may",
"believe", "will", "expect", "project", " estimate", "anticipate",
"plan", or "continue" and similar expressions, among others. Such
factors include, but are not limited to: weakening of economic
conditions that could adversely affect the level of demand for our
products; pricing pressures generally, including cost-containment
measures that could adversely affect the price of or demand for our
products; changes in foreign exchange markets; legislative and
regulatory actions; unanticipated issues arising in connection with
clinical studies and otherwise that affect U.S. Food and Drug
Administration approval of new products; changes in reimbursement
levels from third-party payors; a significant increase in product
liability claims; the impact of investigative and legal proceedings
and compliance risks; the impact of the federal legislation to
reform the United States
healthcare system; changes in financial markets; and changes in the
competitive environment. Additional information concerning these
and other factors that may impact future results is contained in
our filings with the U.S. Securities and Exchange Commission,
including our most recent Form 10-K and Quarterly Reports on Form
10-Q.
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SOURCE Halyard Health, Inc.