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Why Owens & Minor Stock Popped 11% Today

By Rich Smith - Jan 16, 2020 at 4:51PM

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The healthcare solutions company sells a division, and collects a bit of cash.

What happened

The stock of Owens & Minor (OMI -0.18%) closed the day 11.4% higher on Thursday, buoyed by an announcement that the global healthcare solutions company will be selling its Movianto European logistics business to France's EHDH holding company, and applying the proceeds to paying down its debt.  

So what

CEO Ed Pesicka explained the sale as being motivated by a desire to "focus on and invest in our differentiated products, services, and U.S. distribution businesses," implying that Movianto is not really core to this business. It may also not be very profitable. Although Owens & Minor has since changed how it reports its numbers, in the period from 2013 to 2015 at least, S&P Global Market Intelligence data showed its international operations generating little to no profit.

Several piles of coins

Image source: Getty Images.

Now what

So now that business is going away, and closing of the divestiture is expected to be complete sometime in the first half of this year. As for how much money it will get for Movianto, and how much progress the company might therefore make in chipping away at its $1.87 billion debt load, Owens & Minor didn't say. Financial details of the sale were not disclosed.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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