Owens & Minor Closes Movianto Buy

Owens & Minor, Inc. (OMI - Snapshot Report), leading supplier of healthcare products, recently completed its earlier announced acquisition of the majority of Movianto Group. Movianto is the European healthcare third-party logistics (3PL) business of Celesio AG, a global provider of logistics in the healthcare sector.

Owens & Minor purchased Movianto Group from Celesio AG for roughly $158 million (€130 million). The company financed the acquisition with its available cash. It exited the second quarter with cash and cash equivalents of $224.9 million, up 41.3% year over year.

While the buyout is expected to be dilutive to Owens & Minor’s earnings per share in 2012, it is envisaged to be accretive from 2014 onwards. The acquisition also presents a feasible route to enter the European market.

Movianto operates from 23 logistics centers in 11 European nations. With a strength of 1,800 employees, the company renders warehousing, transportation and cold chain logistics along with value-added services like order-to-cash, repackaging and relabeling of products. Thus, the acquisition will enable Owens & Minor to serve a wider customer base of pharmaceutical and medical device manufacturers.

Owens & Minor is expected to make use of Movianto’s operational capabilities and diversify its service channels. The acquisition will also allow the company to expand its foothold in the global market, helped by the complementary services of Movianto.

Per management, the acquisition has enhanced the scale and scope of Owens & Minor's business in the field of third party logistics. The company looks forward to lending assistance to its manufacturing partners on an international platform through third party logistic solutions.

Headquartered in Richmond, Virginia, Owens & Minor is a Fortune 500 company which administers healthcare supply-chain management solutions. The company continues to venture into new markets and expand its core business processes. With strong business fundamentals and foothold expansion in the European market, it is well-positioned to accelerate growth in the years ahead.

However, Owens & Minor continue to rely on select customers for a major share of its revenues. It also depends on group purchasing organizations to seek significant contracts. Additionally, the company faces a tough competitive landscape with Cardinal Health (CAH - Analyst Report) and McKesson Corporation (MCK - Analyst Report).

Owens & Minor currently holds a Zacks #4 Rank, which translates into a short-term Sell rating.