Halyard Health Inc. approved the next phase of its previously announced restructuring plan.
The Alpharetta, Ga.-based medical technology company approved the initial phase of a multiyear restructuring plan in December 2017 to coincide with the divestiture of its surgical and infection prevention business to Owens & Minor, Inc. for about $710 million in cash.
The transaction includes the sale of Halyard's information technology systems, prompting the company to migrate to a platform the company said is more appropriate for its business and size.
The migration, approved by the company's board, is expected to cost between $40 million and $50 million. The company estimates that it will save between $15 million and $19 million in annual costs as a result of the restructuring, which it estimates will be completed by the end of 2019.
Halyard expects to decrease information technology-related costs by about $13 million to $17 million per year with the sale of the surgical business and the reduced scale of its operations.
The company projects that annually, total direct costs to support the enhanced IT systems will be about half of the costs incurred during 2017 to support its existing IT system.
Halyard will disclose additional phases of the plan, including potential supply chain and go-to-market restructurings, when they are approved.