Invacare Corporation to Sell Medical Supplies Business to AssuraMed
ELYRIA, Ohio & TWINSBURG, Ohio--(BUSINESS WIRE)--
Invacare Corporation (NYSE: IVC) and AssuraMed announced today that they
have signed a definitive agreement under which Invacare will sell
Invacare Supply Group (ISG), its domestic medical supplies business, to
AssuraMed for $150 million, subject to certain closing adjustments. This
divestiture is consistent with Invacare's focus on its globalization
strategy to harmonize core global product lines and reduce complexity
within its business. For AssuraMed, a leader in wholesale and
home-delivered medical supplies across the United States, this strategic
purchase allows the company to strengthen its position as a leader in
the medical supplies industry.
AssuraMed Chief Executive Officer Michael B. Petras, Jr., said, ``We are
thrilled to have ISG as a complement to our Independence Medical
business. ISG's strong position in the marketplace and focus on customer
service are an excellent fit with our product portfolio and focus on
customer solutions. This strategic acquisition builds on our strengths
in providing disposable medical supplies to the chronic disease market.
Our new combined customer base will benefit from enhanced distribution
capabilities and services that we will be able to provide.''
Gerald B. Blouch, Invacare President and Chief Executive Officer, said,
``This divestiture represents a significant step forward for Invacare
and it allows us to continue to reduce complexity in our business, focus
on our core product lines and expand globally, with the long-term goal
of returning operating margins back to high single digits.''
Blouch continued, ``I am proud of ISG's many contributions, and I want
to thank the many hard working and dedicated ISG associates, under the
leadership of general manager Douglas Harper, for their commitment to
our success. Our supplies business is respected in the industry, and we
are confident that it will continue to flourish and provide customers
the high-quality products and services they expect under AssuraMed's
The transaction, which is expected to close in early 2013, is subject to
regulatory approval and other customary closing conditions.
Subject to certain closing adjustments and any restructuring charges,
Invacare preliminarily estimates that it will realize net proceeds from
the sale of the ISG business of approximately $140 million, net of tax
and expenses. In the near term, Invacare intends to use the proceeds to
strengthen its balance sheet and reduce debt outstanding under its
revolving credit facility. As previously disclosed by Invacare, net
sales for the ISG business were approximately $299.5 million for 2011
and $246.4 million for the first nine months of 2012. Earnings before
income taxes were approximately $8.0 million for 2011 and $5.1 million
for the first nine months of 2012.
While expected to be initially dilutive, this divestiture is consistent
with Invacare's globalization strategy. As Invacare continues to make
progress on the remediation of its quality systems related to the
previously announced consent decree at its corporate and wheelchair
manufacturing facilities in Elyria, Ohio, it looks forward to
redeploying its engineering talent on new global product development.
Global product platforms are central to eliminating redundant
activities, increasing agility, driving innovation, leveraging supply
chain capabilities, delivering profitable growth and reducing
complexities both internally and externally for its customers. Once
consent decree remediation is completed, Invacare will be better
positioned to accelerate new product development with selective
Jefferies & Company, Inc. acted as financial adviser and Calfee, Halter
& Griswold LLP acted as legal adviser to Invacare Corporation in the
In conjunction with this release, Invacare will host a conference call
December 21, 2012 at 8:30 a.m., EST. Those wishing to participate in the
call live should dial 888-498-8379 or 706-679-5239 for international
callers, and enter meeting ID 83941907.
A digital recording will be available two hours after completion of the
conference call from December 21, 2012 to December 28, 2012. To access
the recording, US/Canada callers should dial 855-859-2056, or
404-537-3406 for international callers, and enter conference ID 83941907.
Invacare Corporation (NYSE:IVC), headquartered in Elyria, Ohio, is the
global leader in the manufacture and distribution of innovative home and
long-term care medical products that promote recovery and active
lifestyles. The Company has 6,200 associates and markets its products in
approximately 80 countries around the world. For more information about
Invacare and its products, visit Invacare's website at .
Headquartered in Twinsburg, Ohio, AssuraMed is a leading mail-order,
direct-to-customer provider of disposable medical products to chronic
disease patients. The company operates through two segments,
Independence Medical and Edgepark Medical Supplies. Independence Medical
serves as an outsourced supply chain for over 7,000 commercial
customers, including durable medical equipment suppliers, independent
pharmacies and wholesale distributors. Edgepark contracts directly with
over 600 managed care organizations (MCOs) to provide direct-to-patient
home delivery of products to hundreds of thousands of patients, while
also providing MCOs with value-added services that drive utilization,
billing efficiencies and patient compliance. Funds managed by private
equity firms and are AssuraMed's primary
shareholders. For detailed company information visit .
Lara Mahoney, Director of Investor
Relations and Corporate Communications440-329-6393orKevin
Gehrt, Vice President - Human Resources & Communications330-963-6998
Source: Invacare Corporation