LEHIGH VALLEY, Pa.--Air Products has announced plans to sell its U.S. Healthcare business, which operates in over 80 locations, has approximately 1,700 employees and serves 120,000 patients mainly throughout the eastern half of the country.
The company will report the business as a discontinued operation beginning in the fiscal fourth quarter but will continue to operate and serve patients until it is transitioned to a new owner, according to a statement issued Tuesday.
Although a number of actions were implemented in 2007 to improve U.S. Healthcare’s performance--including changes in management, a product and service offering simplification program and other measures to drive earnings growth and improve profitability--the business continued to underperform, Air Products said. As a result, in April, the company disclosed that it was evaluating options for the business.
Based on a review of the market and competitive conditions, the company said it had determined U.S. Healthcare no longer fits its business portfolio. At its July meeting, the company’s board of directors authorized management to pursue the sale of the business, and the company is in discussions with potential buyers.
“Unfortunately, despite progress in a number of areas, the U.S. business is still not meeting expectations. At this time, we believe the decision to sell this business is in the best interest of our shareholders. This in no way affects our health care operations outside of the U.S, which continue to perform well and remain a core component of our strategy moving forward,” said Chairman, President and CEO John E. McGlade.
Air Products said it has reached a preliminary agreement to sell its U.S. Healthcare businesses in the metropolitan New York area and in New Jersey, including its A&J Care locations in Glendale and Peekskill, N.Y., and its COPD Services locations in Runnemede, Cape May Courthouse and Cedar Grove, N.J. This sale is expected to be completed by the end of the fiscal year.
Air Products has been in the U.S. health care market since October 2002 when it acquired American Homecare Supply. The company subsequently made additional acquisitions--including its 2004 purchase of Chicago area independent Ultra Care, then one of the largest privately held home respiratory and infusion companies in the country with more than $30 million in sales--growing its U.S. sales to $271 million in fiscal 2007.
Worldwide, Air Products operates in industrial, energy, technology and health care markets in mroe than 40 countries and has annual revenues of $10 billion.