Invacare unloads med supplies unit to AssuraMed for $150M
Invacare ($IVC), a maker of home health devices and related medical equipment, plans to sell off its domestic medical supplies business to AssuraMed for $150 million in order to simplify its business line and reduce debt.
The transaction, in turn, will give AssuraMed a larger U.S. presence in the wholesale and home-delivered medical supplies business. Once the sale closes in early 2013, the company will gain a business that generated nearly $300 million in net sales during 2011 and $246.4 million in the first three quarters of 2012.
Invacare has had a tough time of it in recent months, with general market challenges and a coordinated effort with the FDA to improve its quality systems. The company said those two elements depressed earnings per share in its 2012 third quarter by 64%. Invacare president and CEO Gerald Blouch said in a statement that the sale of its domestic medical supplies business will help it refocus on core product lines, global expansion and the boosting of operating margins back to higher levels.
After closing adjustments and restructuring charges, Invacare said it will make about $140 million from the sale, net of tax and expenses.
Invacare has struggled with the economy since at least 2011, when it laid off about 50 people due to lagging sales and declining customer reimbursements for things like wheelchairs and bariatric equipment.
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