Medical Action Industries Inc. (Nasdaq:MDCI)

The firm is investigating the proposed acquisition of Medical Action Industries Inc. (Nasdaq:MDCI) by Owens & Minor, Inc. (NYSE:OMI). The two companies have signed a definitive agreement under which Owens & Minor will acquire all outstanding shares of Medical Action for $13.80 per share in cash, representing a total transaction value of approximately $208 million, including assumed debt, net of cash. Medical Action reported $287.8 million in net sales from continuing operations for the fiscal year ended March 31, 2014, of which approximately 45% represented sales to Owens & Minor. Owens & Minor expects that the transaction will be accretive to non-GAAP net income per diluted share in 2015 and beyond.

Upon completion of the acquisition, Owens & Minor will significantly advance its strategy of Connecting the World of Medical Products to the Point of CareTM by broadening its service offering to provider and manufacturer customers. Owens & Minor believes the combined platform will offer the following enhancements:

Medical Action's strong tray assembly capabilities complement Owens & Minor's existing ability to provide unitized delivery services to the provider market. By assembling and delivering procedure-specific products to the point of care, Owens & Minor's unitized delivery services significantly improve the ability of provider customers to track, control and reduce procedure costs.

Owens & Minor's leadership position in medical supply logistics coupled with Medical Action's dedicated clinical sales force creates opportunities for enhanced growth in the domestic kit and tray market.

Medical Action's CPT strategy of providing product choice and flexibility for providers is complementary to Owens & Minor's logistics-focused supply chain services, where product choice is highly valued.

The acquisition also enhances Owens & Minor's partnerships with manufacturers by providing continued market access and more robust opportunities to deliver their products directly to the patient through Owens & Minor's unitized services. "The acquisition of Medical Action is consistent with our strategic focus and a natural extension of Owens & Minor's core capabilities as we look to broaden our service offering," said Craig R. Smith, chairman and chief executive officer of Owens & Minor. "It meets the needs of both our provider and manufacturer customers by providing them a more complete and cost-effective solution for the delivery of procedure-specific product kits. With attractive margins and a strong competitive position, we expect this transaction to create value for shareholders and establish a scalable platform for future growth." "We have a long and productive history working with Medical Action as their largest channel partner and understand the organization well," said James L. Bierman, president and chief operating officer of Owens & Minor. "We are confident in our ability to achieve identified synergies and in the enhanced value we can deliver together for patients, providers and manufacturers. Our two companies share similar cultures, and we look forward to welcoming the Medical Action employees to the Owens & Minor team as we build an industry leader."

If you are a current shareholder and would like to discuss your options of exercising your rights as a shareholder, which include ensuring that the company is getting the highest possible price for the company, and that the board of directors will act in the best interest of the shareholders, please contact us.

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