Core Viewpoint - Owens & Minor is transforming into a pure-play company focused on home-based care by selling its Products & Healthcare Services (P&HS) division for $375 million, retaining a 5% stake, marking a strategic shift from supply chain logistics to patient-centric services [2][4][6]. Group 1: Company Transformation - The sale of the P&HS division allows Owens & Minor to redefine its position in the healthcare supply chain, moving from a logistics provider to a direct service provider for patients [2][6]. - The Patient Direct platform, established after acquiring Byram Healthcare in 2020, focuses on home-based care for chronic disease patients, directly connecting to the patient end [7][8]. - The decision to divest the P&HS division is part of a strategy to concentrate on higher-margin, faster-growing segments of the business, enhancing overall financial structure and resource allocation [8][12]. Group 2: Market Context - The U.S. healthcare supply chain has faced declining profit margins, with companies like Owens & Minor experiencing gross margins around 10% and net margins below 2% due to pricing pressures and increased costs [9][10]. - The Patient Direct model offers a more stable and profitable business model, with gross margins 1.5 to 2 times higher than traditional hospital supply chains, appealing to capital markets [9][10]. - The timing of the sale coincides with a resurgence in private equity activity in the healthcare sector, allowing Owens & Minor to achieve favorable pricing while retaining a stake in future growth [14][15]. Group 3: Buyer Perspective - Platinum Equity, the buyer, specializes in operational turnarounds and aims to enhance the value of Owens & Minor's P&HS division through restructuring and resource optimization [16][18]. - The acquisition aligns with Platinum's strategy of integrating and improving underperforming assets in the healthcare supply chain, reflecting a broader trend of private equity involvement in the sector [19][20]. Group 4: Industry Trends - The divestiture by Owens & Minor is part of a larger trend in the medical device industry, where companies are shifting from manufacturing to service-oriented models, emphasizing asset-light operations [22][23]. - The rise of home-based care is driven by policy changes and a growing demand for chronic disease management, positioning companies like Owens & Minor to capitalize on this shift [24][25]. - The transformation reflects a broader industry movement towards decentralization, where patient-centric models are becoming the focal point of healthcare delivery [27][32].