Owens & Minor (O&M) makes sure surgeons aren't left empty handed after shouting, "Scalpel, stat!" A leading distributor of medical and surgical supplies, the company carries more than 200,000 products from about 1,200 manufacturers. Products distributed by O&M include surgical dressings, endoscopic and intravenous products, needles, syringes, sterile procedure trays, gowns, gloves, and sutures. The firm also offers software, consulting, and other services to help customers manage their supplies. O&M's customers are primarily hospitals and health systems and the purchasing organizations that serve them. It delivers products to roughly 4,000 health care providers from about 50 distribution centers across the US.
Though US operations account for most of O&M's sales, the company is working to branch out into international medical distribution markets, including Europe.
About 95% of O&M's sales come from the distribution of medical supplies. The company's major product suppliers include Covidien and Johnson & Johnson, whose products account for almost 15% and about 10% of O&M's revenues, respectively. In addition to delivering products made by its supply partners, the distributor sells some 2,900 value products under its own MediChoice label.
Sales & Marketing
Most of O&M's sales are attributed to contracts with acute-care hospitals, which are often represented by group purchasing organizations (GPOs) or integrated healthcare networks (IHNs). GPO Novation is the largest client, accounting for around 35% of the company's earnings, with GPOs MedAssets (including its recently acquired Broadlane unit) accounting for more than 20% of sales and Premier accounting for 20%. The company also has an ongoing exclusive supplier agreement with the US Department of Defense. Additional clients include other government agencies and alternate health care locations such as physician clinics, nursing homes, and surgery centers.
As the health care industry has consolidated, so have the industries that serve it, and O&M works to remain competitive by providing supply chain management tools and services in addition to supplies to help its customers control costs. Its OMSolutions business unit provides outsourcing and resource management services to acute care providers, including fee-based one-on-one consultations and physical inventory reviews, as well as inventory tracking and purchasing software. Many of the company's information technology and infrastructure operations are managed by third party Dell Perot Systems, the IT outsourcing unit of Dell. (The company's agreement with Dell expires at the end of 2014.)
While the company experiences a successful level of revenue and income growth from greater product and service sales to existing customers, as well as the addition of new clients, O&M doesn't shy away from partnerships and acquisitions as other ways to help boost sales and services. For example, in 2012 O&M entered a seven-year, lease and technology services deal valued at $68 million with Penske Truck Leasing and its Penske Logistics unit to consolidate its delivery fleet with one vendor.
Mergers & Acquisitions
O&M forged moved to expand its third-party logistics presence and scale into the European health care market in 2012 when it paid some €130 million ($158 million) to purchase a majority of the Movianto Group from Celesio AG. Movianto Group brought with it 23 facilities in 11 European countries and gave O&M a firm global platform to expand upon.
Investment firms own more than a third of the company, with T. Rowe Price Associates and BlackRock at the top of the list, respectively owning 10% and 7% of the company. – less
38 salaries reported
$14.14 per hour
17 salaries reported
$14.33 per hour
19 salaries reported
$15.03 per hour