ALPHARETTA, Ga., June 8, 2023
/PRNewswire/ -- Avanos Medical, Inc. (NYSE: AVNS) today announced
it has entered into a definitive agreement to sell its Respiratory
Health (RH) business to SunMed Group Holdings, LLC (SunMed).
Headquartered in Grand Rapids,
Michigan, SunMed is a leading North American manufacturer
and distributor of consumable medical devices for anesthesia and
respiratory care with a comprehensive product portfolio that spans
the continuum of care from first responders to hospitals and home
care.
The divestiture of the RH business represents a key component of
Avanos' ongoing three-year transformation process, and accelerates
the Company's efforts to focus its portfolio on markets where it is
well positioned to succeed.
"Earlier this year, we shared our strategy and intent to
optimize our portfolio by focusing on higher-margin and
higher-growth markets – particularly in our Digestive Health and
Pain Management & Recovery product categories," said
Joe Woody, Avanos chief executive
officer. "We expect that divesting the Respiratory Health business
– along with our ongoing SKU rationalization initiatives and future
M&A opportunities – will allow us to meaningfully transform the
financial profile of Avanos."
"SunMed has deep experience and strong expertise in the global
respiratory health consumables market, making it an ideal home for
Avanos' RH business," said Hank
Struik, SunMed's chief executive officer. "We believe
Avanos' BALLARD* closed-suction technology will be a powerful
addition to SunMed's broad and growing portfolio."
Sale of the RH Business
The transaction includes
substantially all of the assets primarily used in the RH business,
including fixed assets, inventory, intangible assets – including
the BALLARD*, MICROCUFF* and
endOclear* brands – and long-term
leases for two manufacturing facilities located in Mexico (Magdalena and Nogales 2).
Avanos will provide transition services after closing as SunMed
works to integrate its new RH business within its product
portfolio.
The net proceeds from the transaction will enhance Avanos'
balance sheet flexibility and provide additional capacity for
Avanos to deploy capital in a focused and disciplined approach to
M&A in the Company's core categories and markets.
The transaction is expected to close in late 2023, subject to
customary closing conditions. The Company plans to share additional
details about the transaction during its Investor Day event on
June 20, 2023.
Alston & Bird LLP is serving as legal counsel to Avanos.
Goodwin Procter LLP is serving as SunMed's legal counsel.
About Avanos Medical, Inc.
Avanos Medical, Inc. (NYSE:
AVNS) is a medical technology company focused on delivering
clinically superior medical device solutions that will help
patients get back to the things that matter. Headquartered in
Alpharetta, Georgia, we are
committed to addressing some of today's most important healthcare
needs, including providing a vital lifeline for nutrition to
patients from hospital to home, and reducing the use of opioids
while helping patients move from surgery to recovery. We develop,
manufacture and market our recognized brands globally and hold
leading market positions in multiple categories across our
portfolio. For more information, visit Avanos.com and follow
Avanos Medical on Twitter (@AvanosMedical), LinkedIn and
Facebook.
About SunMed Group Holdings, LLC
SunMed, headquartered
in Grand Rapids, Michigan, with
manufacturing and distribution sites in the United States, Mexico, China
and Europe, is a leading medical
device manufacturer, offering one of the most comprehensive
portfolios of consumable anesthesia and respiratory care products.
SunMed's product portfolio spans the continuum of care from first
responders to hospitals and home care, with safety, patient comfort
and clinical performance in mind. SunMed's comprehensive portfolio
of trusted respiratory care and anesthesia products include premier
brands such as Salter Labs®, Ethox Medical™, Ventlab™ and Westmed™.
Currently, SunMed has over 1 million square feet of manufacturing
space, providing comprehensive expertise in all plastics materials
and conversion—supported by a world-class Quality Management
System. Frazier Healthcare Partners, a leading healthcare
investment firm, acquired a majority ownership stake in SunMed in
2021.
* Registered Trademark or Trademark of Avanos Medical, Inc.,
or its affiliates. © 2018 AVNS. All rights reserved.
Note Regarding Forward-Looking Statements
This press release contains information that includes or is
based on "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on the current plans and expectations of
management and are subject to various risks and uncertainties that
could cause the actual results of Avanos Medical, Inc. to differ
materially from those expressed or implied in such statements.
Forward-looking statements include all statements that do not
relate solely to historical or current facts, and can generally be
identified by the use of words such as "will," "expect," and
similar expressions. The forward-looking statements include
statements regarding the impact of the transaction on the Company's
financial profile, and its ability to enhance the Company's balance
sheet and provide additional capacity for the Company to deploy
capital, and the expected timing of the closing. Such factors
include, but are not limited to, the Company's ability to
successfully execute on or achieve the expected benefits of its
transformation process. The information contained herein speaks
only as of the date of this press release, and the Company
undertakes no obligation to update forward-looking statements,
except as may be required by the securities laws.
Additional information concerning these and other factors that
may impact future results is contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 2022, and other periodic reports
filed with the Securities and Exchange Commission.
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SOURCE Avanos Medical, Inc.