Halyard Health, a global supplier of medical devices and solutions, is selling its Indian subsidiary’s Surgical and Infection Prevention (S&IP) business division to Owens & Minor for ₹45 billion (US$710 million).
The transaction confirms investor appetite and growing opportunities in India’s healthcare sector. “With a population that is soon going to exceed China’s, India’s healthcare needs are burgeoning,” said Akil Hirani, the managing partner at Majmudar & Partners, who led a team advising Halyard on Indian law matters. “Hospital chains, diagnostic clinics, life sciences companies doing drug discovery, and medical devices firms are seeing a huge potential and are being aggressively pursued by strategic and financial investors.”
S&IP provides healthcare supplies and solutions that target the prevention of healthcare-associated infections. Its portfolio of surgical and infection prevention offerings includes sterilization wraps, surgical drapes and gowns, facial protection, protective apparel and medical exam gloves.
[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”3″ ihc_mb_template=”2″ ]
Hirani told India Business Law Journal that the deal was challenging because it first involved a carve-out of Halyard’s S&IP business from its medical devices business and then a subsequent sale to Owens & Minor. “Asset and employee transfers had to be handled carefully to ensure that those assets and employees substantially involved in the medical devices business were not transferred to the buyer,” he said.
The sale gives Halyard a singular focus on medical devices, where it has a strong position in its core franchises of pain management and chronic care. The company said it would benefit from “a more simplified structure, enhanced management focus and significant firepower to invest in growth” through research and development and M&A.
For Owens & Minor, the acquisition of Halyard’s S&IP business complements its own offerings, as it continues to provide vital supply chain services to healthcare providers and manufacturers of healthcare products. The transaction is expected to close in the first quarter of 2018.
Halyard will provide IT and other transition services to Owens & Minor for at least one year after closing as they integrate the S&IP business into the new ownership. Owens & Minor will also offer transition services to Halyard.
Alston & Bird acted for Halyard on US law matters. Simpson Thacher & Bartlett was the lead legal counsel to Owens & Minor, while food, drug and device law specialists Hyman Phelps & McNamara provided guidance on regulatory matters, and Eversheds Sutherland advised on international legal matters.
[/ihc-hide-content]
