Owens & Minor Enters into Receivables Sale Program with O&M Funding

On October 18, 2024, Owens & Minor Inc. announced the execution of a Receivables Purchase Agreement, marking a significant agreement with O&M Funding LLC and Owens & Minor Medical, LLC. This transaction involves the sale of accounts receivable up to $450 million, handled on a limited-recourse basis with various purchasing entities. Additionally, PNC Bank, National Association serves as the Administrative Agent, and PNC Capital Markets LLC acts as the Structuring Agent in this arrangement.

The Receivables Sale Program, replacing the previous Receivables Financing Agreement dating back to February 19, 2020, will be recognized under ASC 860 for Transfers and Servicing. As part of this program, Owens & Minor will be responsible for servicing and collection activities on behalf of the Purchasers. Notably, the company will not retain any beneficial interest in the accounts receivable sold. The program is scheduled to terminate in October 2027.

Included in the Receivables Sales Program are standard representations, warranties, and covenants, ensuring the eligibility and security of the receivables being transferred as well as outlining termination events. These events allow for the potential termination of the program under specific circumstances such as non-payment, defaults, a change in control, or events affecting overall credit quality.

Proceeds from the sale of receivables under the Receivables Sale Program are earmarked for general corporate uses. The company has provided details regarding the agreements involved in this arrangement in Exhibit 10.1, 10.2, and 10.3, attached to the filing and incorporated by reference.

PNC Bank, National Association, and PNC Capital Markets LLC, the key entities in the aforementioned agreement, have established relationships with Owens & Minor and its subsidiaries, offering financial services like commercial banking, investment banking, and advisory services, for which they receive customary fees.

This transaction falls under Item 1.01 under the category of Entry Into a Material Definitive Agreement, while also satisfying Item 2.03 regarding the Creation of a Direct Financial Obligation or Obligation under an Off-Balance Sheet Arrangement of a Registrant, as outlined in the Form 8-K filing with the Securities and Exchange Commission.

The company confirmed that the filings will comply with the necessary requirements of the Securities Exchange Act of 1934, with Heath H. Galloway, Executive Vice President, General Counsel, and Corporate Secretary signing on behalf of Owens & Minor, Inc. The report was signed on October 22, 2024, ensuring the document’s validity and accuracy.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Owens & Minor’s 8K filing here.

Owens & Minor Company Profile

Owens & Minor, Inc, together with its subsidiaries, operates as a healthcare solutions company worldwide. It operates through Products & Healthcare Services and Patient Direct segments. The Products & Healthcare Services segment offers a portfolio of products and services to healthcare providers and manufacturers.