Please ensure Javascript is enabled for purposes of website accessibility

Why Apria Stock Is Skyrocketing Today

By Keith Speights – Jan 10, 2022 at 12:29PM

Key Points

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

News of a big acquisition excited investors.

What happened

Shares of home healthcare equipment provider Apria (APR) were skyrocketing 26.2% higher as of 12:05 p.m. ET on Monday. The huge jump came after Owens & Minor (OMI 2.05%) announced plans to acquire Apria for around $1.45 billion.

So what

Owens & Minor offered $37.50 in cash per share for Apria. That's a 26% premium to the price of Apria's shares at the market close on Friday, and a 24% premium over Apria's 30-day volume-weighted average price. It's also only slightly below the all-time high for the healthcare stock

A person drawing a big fish with its mouth open behind a small fish.

Image source: Getty Images.

The acquisition appears to be good news, therefore, for Apria shareholders. But is it a smart move for Owens & Minor? Probably so.

Owens & Minor bought medical supply distributor Byram Healthcare in 2017. The addition of Apria should be a good fit with Byram's business. Owens & Minor will be in a stronger position to target the $50 billion home healthcare market.

From a financial perspective, acquiring Apria will be accretive to Owens & Minor's revenue; adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA); and earnings per share. The deal also diversifies Owens & Minor's revenue stream. 

Now what

The transaction has already been unanimously approved by the boards of directors of both Owens & Minor and Apria. Two additional key hurdles remain -- the approval of Apria's shareholders and a green light from regulators. However, these hurdles shouldn't be hard to jump. The companies expect that the acquisition will close during the first half of this year. 

Keith Speights 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.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.