$850 Million Deal to Acquire HGI

NEW YORK — Private equity investor Clayton, Dubilier &
Rice and GS Capital Partners (Goldman Sachs) announced July 27 they
have agreed to acquire HGI Holdings from The Jordan Co. and members
of the Harrington family.

Headquartered in Cleveland, HGI is a mail-order provider of
disposable medical products to chronic disease patients. A Wall
Street Journal report pegged the company’s purchase price at
$850 million.

HGI operates through its Edgepark Medical Supplies and
Independence Medical divisions, offering more than 30,000 products
in market segments including ostomy, diabetes, urological, enteral,
incontinence and wound care, “often providing hard-to-find products
that other home care suppliers do not carry,” according to a
release.

“HGI is a market-leading distributor in the large and growing
home health market and will continue to benefit from highly
favorable long-term trends,” said Richard J. Schnall, a CD&R
partner. “The company operates an attractive and efficient business
model that improves the quality of care and lowers health care
costs for both patients and payers, while providing manufacturers
with cost-effective access to a highly fragmented commercial
customer and patient base.”

Edgepark contracts directly with over 600 MCOs to provide
direct-to-consumer home delivery to approximately 300,000 patients,
while Independence serves as an outsourced supply chain for
approximately 5,500 commercial customers including DME providers,
independent pharmacies and wholesale distributors.

Paul Pressler of CD&R will serve as the company’s chairman.
Prior to joining CD&R, Pressler served as president and CEO of
Gap Inc. and before that spent 15 years with The Walt Disney Co. in
various senior management roles.

The transaction is expected to close in the beginning of the
fourth quarter.