Invacare offloads supply division, settles with FDA
ELYRIA, Ohio – In a busy week, Invacare has sold Invacare Supply Group (ISG) and reached an agreement with the Food and Drug Administration (FDA).
Invacare has sold ISG to AssuraMed, a Twinsburg, Ohio-based medical-supply distributor backed by private equity firms, for $150 million.
“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,” stated Gerald Blouch, Invacare president and CEO, in a press release.
Invacare is expected to close the deal in early 2013.
As for its ongoing negotiations with the FDA, Invacare has reached an agreement with the agency that will limit production and certain design activities at its two Elyria facilities until they are inspected and found in compliance with regulations through a third-party review. All other worldwide manufacturing facilities will remain in full operation.
“The terms of the decree contain important exceptions that will allow Invacare to continue to provide medically necessary products for the consumers who need them, as well as ongoing replacement, service and repair of products already in use,” Blouch stated in a release.
Those terms, which have been approved by the United States District Court for the Northern District of Ohio, include a limit on Invacare’s manufacturing and distribution of custom power and manual wheelchairs, and power beds at or from its manufacturing facilities. The company may continue to fulfill orders that are already in Invacare’s order system at the time the court enters the decree.
The decree also permits the manufacturing and distribution of power wheelchairs from its Taylor Street facility provided a clinical evaluation determines that those products are medically necessary for a certain patient’s condition which cannot be adequately addressed by another manufacturer’s product.
A copy of the decree will be disclosed by Invacare in an SEC filing.
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