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Halyard Health board approves initial phase of multiyear restructuring plan

Halyard Health Inc.'s board approved the initial phase of a multiyear restructuring plan in conjunction with the company's divestiture of its surgical and infection prevention business.

In November, Halyard Health agreed to sell its surgical and infection prevention business to Owens & Minor Inc. for about $710 million in cash.

The initial phase of the plan, which is expected to be substantially completed by the end of 2019, aims to align organizational and management structure with the company's remaining medical devices business.

The company expects to incur between $8 million and $10 million of pretax costs, of which $6 million to $7 million is for employee retention, severance and benefits and the remaining $2 million to $3 million is for third-party services and other related costs. These are cash costs that will be incurred as Halyard executes the initial phase of the plan, which is expected to be complete by the end of 2019.

Halyard expects to save between $11 million and $13 million on an annualized basis once the initial phase of the plan is completed.

In addition, Halyard Health reviewing restructuring and enhancing options for its information technology systems, as well as its supply chain and go-to-market model to eliminate stranded costs resulting from the divestiture.