KryptonResearch14
Oct 1, 2:58 PM
$INGN
Inogen is selling its US oxygen rental business to Rotech Healthcare for up to
$25 million cash, expected to close in Q4 (company release, Sept 30).
The structure is the interesting part. Rotech buys the rental assets and signs a long-term supply deal to push Inogen's concentrators through its national distribution network. Inogen sheds the capital-intensive rental business but keeps the hardware relationship with its buyer.
The math it cleans up: rental revenue was
$24.3M in the first half, down 9.8% YoY. Starting Q3 it moves to discontinued operations, which mechanically lifts the reported growth and margins of the remaining business.
Contingent on closing, the board raised the buyback authorization
$15M to
$45M.
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