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Owens & Minor Announces Upsize and Pricing of Senior Secured Notes Offering

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Owens & Minor (NYSE:OMI) has announced the pricing of its $1 billion senior secured notes offering due 2030, bearing a 10.000% interest rate. The notes, priced at 100% of principal amount, are expected to close on April 4, 2025.

The proceeds will primarily finance the previously announced acquisition of Rotech Healthcare Holdings. Until the acquisition closes, the proceeds will be held in escrow. The notes will be guaranteed by OMI and certain domestic subsidiaries, secured by first-priority liens on assets securing the company's existing loan facilities.

The funding package includes the notes offering proceeds, cash on hand, and planned borrowings under a new senior secured incremental term loan B facility. These funds will cover the acquisition costs, Rotech debt repayment, and related expenses.

Owens & Minor (NYSE:OMI) ha annunciato il prezzo della sua offerta di note senior garantite da 1 miliardo di dollari con scadenza nel 2030, con un tasso di interesse del 10.000%. Le note, valutate al 100% del valore nominale, dovrebbero chiudere il 4 aprile 2025.

I proventi finanzieranno principalmente l'acquisizione di Rotech Healthcare Holdings precedentemente annunciata. Fino alla chiusura dell'acquisizione, i proventi saranno mantenuti in deposito. Le note saranno garantite da OMI e da alcune sussidiarie nazionali, garantite da pegni di prima priorità su beni che garantiscono le attuali strutture di prestito dell'azienda.

Il pacchetto di finanziamento include i proventi dell'offerta di note, contante a disposizione e prestiti pianificati sotto una nuova struttura di prestito senior garantito incrementale di tipo B. Questi fondi copriranno i costi di acquisizione, il rimborso del debito di Rotech e le spese correlate.

Owens & Minor (NYSE:OMI) ha anunciado el precio de su oferta de notas senior garantizadas de 1.000 millones de dólares con vencimiento en 2030, que lleva una tasa de interés del 10.000%. Las notas, valoradas al 100% del monto principal, se espera que cierren el 4 de abril de 2025.

Los ingresos financiarán principalmente la adquisición de Rotech Healthcare Holdings previamente anunciada. Hasta que se cierre la adquisición, los ingresos se mantendrán en custodia. Las notas estarán garantizadas por OMI y ciertas subsidiarias nacionales, aseguradas por gravámenes de primera prioridad sobre los activos que aseguran las instalaciones de préstamo existentes de la empresa.

El paquete de financiamiento incluye los ingresos de la oferta de notas, efectivo disponible y préstamos planificados bajo una nueva instalación de préstamo senior garantizado incremental tipo B. Estos fondos cubrirán los costos de adquisición, el reembolso de la deuda de Rotech y los gastos relacionados.

Owens & Minor (NYSE:OMI)2025년 4월 4일 마감 예정인 10억 달러 규모의 2030년 만기 선순위 담보 노트 발행의 가격을 발표했습니다. 이 노트는 10.000%의 이자율을 보유하고 있으며, 원금의 100%로 가격이 책정되었습니다.

수익금은 주로 이전에 발표된 Rotech Healthcare Holdings의 인수를 재원으로 사용할 예정입니다. 인수가 완료될 때까지 수익금은 에스크로에 보관됩니다. 이 노트는 OMI와 일부 국내 자회사에 의해 보증되며, 회사의 기존 대출 시설을 담보하는 자산에 대해 우선순위 담보권으로 보호됩니다.

자금 패키지는 노트 발행 수익금, 보유 현금 및 새로운 선순위 담보 증액 대출 B 시설에 따른 계획된 차입금을 포함합니다. 이 자금은 인수 비용, Rotech의 부채 상환 및 관련 비용을 충당할 것입니다.

Owens & Minor (NYSE:OMI) a annoncé le prix de son offre de billets senior garantis de 1 milliard de dollars arrivant à échéance en 2030, portant un taux d'intérêt de 10.000%. Les billets, évalués à 100% du montant nominal, devraient se clôturer le 4 avril 2025.

Les produits financeront principalement l'acquisition de Rotech Healthcare Holdings précédemment annoncée. Jusqu'à ce que l'acquisition soit finalisée, les produits seront conservés en séquestre. Les billets seront garantis par OMI et certaines filiales nationales, sécurisés par des privilèges de premier rang sur des actifs garantissant les installations de prêt existantes de l'entreprise.

Le paquet de financement comprend les produits de l'offre de billets, des liquidités disponibles et des emprunts prévus dans le cadre d'une nouvelle facilité de prêt senior garanti supplémentaire de type B. Ces fonds couvriront les coûts d'acquisition, le remboursement de la dette de Rotech et les dépenses connexes.

Owens & Minor (NYSE:OMI) hat den Preis für sein 1 Milliarde Dollar umfassendes Angebot an senior gesicherten Anleihen mit Fälligkeit im Jahr 2030 bekannt gegeben, das einen Zinssatz von 10.000% trägt. Die Anleihen, die zu 100% des Nennbetrags bewertet sind, sollen am 4. April 2025 abgeschlossen werden.

Die Einnahmen werden hauptsächlich die zuvor angekündigte Übernahme von Rotech Healthcare Holdings finanzieren. Bis zur Schließung der Übernahme werden die Einnahmen in Treuhand gehalten. Die Anleihen werden von OMI und bestimmten inländischen Tochtergesellschaften garantiert und durch vorrangige Pfandrechte auf Vermögenswerte gesichert, die die bestehenden Kreditfazilitäten des Unternehmens sichern.

Das Finanzierungspaket umfasst die Erlöse aus dem Anleiheangebot, Bargeld und geplante Kredite im Rahmen einer neuen senior gesicherten zusätzlichen Terminkredit B-Fazilität. Diese Mittel werden die Übernahmekosten, die Rückzahlung der Rotech-Schulden und damit verbundene Ausgaben abdecken.

Positive
  • Successful upsize of debt offering to $1 billion indicates strong market interest
  • Acquisition of Rotech Healthcare will expand business operations
Negative
  • High interest rate of 10% on new debt increases interest expense burden
  • Significant increase in debt level with $1 billion new notes
  • Additional debt from planned incremental term loan B facility will further increase leverage

Insights

Owens & Minor's $1 billion senior secured notes offering at 10% interest represents a significant financial decision with material implications for the company's capital structure. The sheer size of this debt issuance is notable given OMI's $698 million market capitalization—effectively taking on debt that exceeds its entire market value.

The 10% interest rate is particularly concerning, representing an annual $100 million interest expense burden that will substantially impact cash flows. This high yield reflects either challenging capital market conditions for OMI or lender perception of elevated risk in the Rotech acquisition.

The security structure is telling—these notes will initially be secured by an escrow account but will eventually share first-priority liens with existing debt facilities following the acquisition. This collateralization was likely necessary to secure the offering but restricts future financial flexibility.

While strategic acquisitions can create value, the transformation of OMI's capital structure introduces significant financial risk. Without disclosed details on Rotech's financials or expected synergies, it's difficult to assess whether the potential returns justify this substantial leverage increase. This transaction fundamentally alters OMI's risk profile, potentially amplifying both upside and downside scenarios for investors while significantly increasing fixed obligations during a period of still-elevated interest rates.

RICHMOND, Va.--(BUSINESS WIRE)-- Owens & Minor, Inc. (NYSE:OMI) (the “Company”) announced today the upsize and pricing of its private offering (the “Offering”) of $1 billion aggregate principal amount of its 10.000% senior secured notes due 2030 (the “Notes”). The Offering is expected to close on April 4, 2025, subject to customary closing conditions. The Notes will bear interest at the rate of 10.000% per year. The Notes will mature on April 15, 2030 (subject to certain earlier maturity triggers). The Notes were offered at a price of 100% of their principal amount.

Unless the previously announced acquisition (the “Acquisition”) of Rotech Healthcare Holdings Inc. (“Rotech”) is consummated substantially concurrently with the closing of the Offering, the Company will deposit the gross proceeds from the Offering into a segregated escrow account until the date that the Acquisition has been consummated. The consummation of the Acquisition is subject to customary closing conditions.

The Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by the Company and certain domestic subsidiaries of the Company that guarantee the Company’s existing term loan facility and revolving credit facility. If the issue date occurs prior to the closing of the Acquisition (and subject to applicable grace periods), the Notes will be secured only by a first-priority security interest in the escrow account and all funds on deposit therein. Following the completion of the Acquisition, the Notes and related guarantees will be secured on a first-priority basis by liens on the same assets that secure the Company’s existing term loan facility and revolving credit facility.

Upon the closing of the Offering or, if applicable, upon consummation of the Acquisition, the Company intends to use the net proceeds of the Offering, together with cash on hand and expected borrowings under a new senior secured incremental term loan B facility to finance the consummation of the Acquisition and the other transactions contemplated by the merger agreement, including the repayment of Rotech debt and to pay Acquisition related fees and expenses. Any remaining net proceeds will be used for working capital and general corporate purposes.

The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), any state securities laws or the securities laws of any other jurisdiction, and may not be offered or sold in the United States, or for the benefit of U.S. persons, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities or blue sky laws. Accordingly, the Notes were offered only to persons reasonably believed to be “qualified institutional buyers,” as that term is defined under Rule 144A of the Securities Act, or outside the United States to non-“U.S. persons” in accordance with Regulation S under the Securities Act.

A confidential offering memorandum for the Offering has been made available to such eligible persons. The Offering is being conducted in accordance with the terms and subject to the conditions set forth in such confidential offering memorandum.

This press release shall not constitute an offer to sell, a solicitation to buy or an offer to purchase or sell any securities. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offer, or solicitation to buy, if at all, will be made only by means of a confidential offering memorandum. The Offering is not conditioned on the consummation of the Acquisition, which, if consummated, may occur subsequent to the closing of the Offering. This press release does not constitute a notice of repayment of any outstanding indebtedness of Rotech. The terms and conditions of the incremental term loan B facility have not been finalized and are therefore subject to change. The completion of the Offering is not conditioned upon our entering into the incremental term loan B facility, and our entering into such facility is not conditioned upon completion of the Offering.

About Owens & Minor

Owens & Minor, Inc. (NYSE: OMI) is a Fortune 500 global healthcare solutions company providing essential products and services that support care from the hospital to the home. For over 100 years, Owens & Minor and its affiliated brands, Apria®, Byram® and HALYARD*, have helped to make each day better for the patients, providers, and communities we serve. Powered by more than 20,000 teammates worldwide, Owens & Minor delivers comfort and confidence behind the scenes so healthcare stays at the forefront. Owens & Minor exists because every day, everywhere, Life Takes Care™.

* Registered Trademark or Trademark of O&M Halyard or its affiliates.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding the Company’s expectations regarding the proposed Acquisition and the future performance and financial results of the Company’s business and other non-historical statements. Some of these statements can be identified by terms and phrases such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words, including statements relating to the Acquisition, the Offering and the related financing for the Acquisition. The Company cautions readers of this communication that such “forward looking statements,” wherever they occur in this press release or in other statements attributable to the Company, are necessarily estimates reflecting the judgment of the Company’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the “forward-looking statements.”

Factors that could cause the Company’s actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the inability to complete the proposed Acquisition due to the failure to satisfy other conditions to completion of the proposed Acquisition, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the proposed Acquisition; risks related to disruption of management’s attention from the Company’s ongoing business operations due to the proposed Acquisition; the effect of the announcement of the proposed Acquisition on the Company’s relationships with its customers, suppliers and other third parties, as well as its operating results and business generally; the risk that the proposed Acquisition will not be consummated in a timely manner; exceeding the expected costs of the proposed Acquisition; the risk that problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected; and the risk that the combined company may be unable to achieve expected synergies or that it may take longer than expected to achieve those synergies.

Additional factors that could cause the Company’s actual outcomes or results to differ materially from those described in these forward-looking statements can be found in the “Risk Factors” sections of the Company’s most recent Annual Report on Form 10-K for the period ended December 31, 2024, as such factors may be further updated from time to time in the Company’s other filings with the U.S. Securities and Exchange Commission (the “SEC”). These reports are or will be accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements included in this press release and in the Company’s filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

OMI-CORP

OMI-IR

Media contact

Stacy Law

media@owens-minor.com

Source: Owens & Minor, Inc.

FAQ

What is the interest rate and maturity date for OMI's new senior secured notes?

The notes carry a 10.000% interest rate and will mature on April 15, 2030, subject to certain earlier maturity triggers.

How will OMI use the proceeds from the $1 billion notes offering?

The proceeds will finance the Rotech Healthcare acquisition, repay Rotech debt, cover acquisition-related expenses, and any remainder for working capital and general corporate purposes.

What security measures are in place for OMI's new notes offering?

The notes will be secured by first-priority liens on company assets and fully guaranteed by OMI and certain domestic subsidiaries that guarantee existing loan facilities.

When is the expected closing date for OMI's notes offering?

The notes offering is expected to close on April 4, 2025, subject to customary closing conditions.
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