Invacare sells medical supplies business to AssuraMed

ELYRIA, Ohio, Dec. 21., 2012—Invacare Corporation IVC and AssuraMed have signed a definitive agreement under which Invacare will sell Invacare Supply Group, its domestic medical supplies business, to AssuraMed for $150 million, subject to certain closing adjustments. This divestiture is consistent with Invacare’s focus on its globalization strategy to harmonize core global product lines and reduce complexity within its business. For AssuraMed, a leader in wholesale and home-delivered medical supplies across the United States, this strategic purchase allows the company to strengthen its position as a leader in the medical supplies industry.

AssuraMed Chief Executive Officer Michael B. Petras, Jr., said “We are thrilled to have ISG as a complement to our Independence Medical business. ISG’s strong position in the marketplace and focus on customer service are an excellent fit with our product portfolio and focus on customer solutions. This strategic acquisition builds on our strengths in providing disposable medical supplies to the chronic disease market. Our new combined customer base will benefit from enhanced distribution capabilities and services that we will be able to provide.”

Gerald B. Blouch, Invacare president and CEO, said, “This divestiture represents a significant step forward for Invacare and it allows us to continue to reduce complexity in our business, focus on our core product lines and expand globally, with the long-term goal of returning operating margins back to high single digits.”

“I am proud of ISG’s many contributions, and I want to thank the many hard working and dedicated ISG associates, under the leadership of general manager Douglas Harper, for their commitment to our success,” Blouch continued. “Our supplies business is respected in the industry, and we are confident that it will continue to flourish and provide customers the high-quality products and services they expect under AssuraMed’s leadership.”

The transaction, which is expected to close in early 2013, is subject to regulatory approval and other customary closing conditions.

Subject to certain closing adjustments and any restructuring charges, Invacare preliminarily estimates that it will realize net proceeds from the sale of the ISG business of approximately $140 million, net of tax and expenses. In the near term Invacare intends to use the proceeds to strengthen its balance sheet and reduce debt outstanding under its revolving credit facility. As previously disclosed by Invacare, net sales for the ISG business were approximately $299.5 million for 2011 and $246.4 million for the first nine months of 2012. Earnings before income taxes were approximately $8.0 million for 2011 and $5.1 million for the first nine months of 2012.

While expected to be initially dilutive, this divestiture is consistent with Invacare’s globalization strategy. As Invacare continues to make progress on the remediation of its quality systems related to the previously announced consent decree at its corporate and wheelchair manufacturing facilities in Elyria, Ohio, it looks forward to redeploying its engineering talent on new global product development. Global product platforms are central to eliminating redundant activities, increasing agility, driving innovation, leveraging supply chain capabilities, delivering profitable growth and reducing complexities both internally and externally for its customers. Once consent decree remediation is completed, Invacare will be better positioned to accelerate new product development with selective acquisitions. Jefferies & Company, Inc., acted as financial adviser and Calfee, Halter & Griswold LLP acted as legal adviser to Invacare Corporation in the transaction.

Invacare Corporation IVC, headquartered in Elyria, Ohio, is the global leader in the manufacture and distribution of innovative home and long-term care medical products that promote recovery and active lifestyles. The company has 6,200 associates and markets its products in approximately 80 countries around the world. For more information visit www.invacare.com.

Headquartered in Twinsburg, Ohio, AssuraMed is a leading mail-order, direct-to-customer provider of disposable medical products to chronic disease patients. The company operates through two segments, Independence Medical and Edgepark Medical Supplies. Independence Medical serves as an outsourced supply chain for over 7,000 commercial customers, including durable medical equipment suppliers, independent pharmacies and wholesale distributors. Edgepark contracts directly with over 600 managed care organizations (MCOs) to provide direct-to-patient home delivery of products to hundreds of thousands of patients, while also providing MCOs with value-added services that drive utilization, billing efficiencies and patient compliance. Funds managed by private equity firms Clayton, Dubilier & Rice and Goldman Sachs’ GS Capital Partners are AssuraMed’s primary shareholders. For detailed company information visit www.assuramed.com.