Cardinal Health Buys AssuraMed for $2B
Posted on February 14, 2013 @ 11:18 am
Cardinal Health spared no expense in expressing its love this Valentine’s Day, shelling out $2.07 billion in a sweetheart deal to acquire privately held AssuraMed of Twinsburg, Ohio.
Cardinal is funding the purchase with a combination of cash and $1.3 billion in debt loaned by the Bank of America. The Dublin, Ohio-based distributor of medical products and pharmaceuticals expects to close the deal by early April.
Founded in 1928 in Garfield Heights, Ohio, (a Cleveland suburb), AssuraMed provides medical supplies to home-based patients suffering from diabetes, incontinence, respiratory conditions, urological disorders, wounds and other chronic ailments. The company generated $1 billion in sales and currently serves more than 1 million patients nationally with more than 30,000 products. Just last month, it finalized the $150 million acquisition of Elyria, Ohio-based home and long-term care medical product provider Invacare Corp.
“AssuraMed is a natural extension of the Cardinal Health businesses and of our mission to be essential to care. The acquisition allows us to serve the growing number of Americans treated in home settings—particularly those patients recovering from acute episodes and those suffering with chronic diseases,” Barrett said. “This is a platform opportunity for Cardinal Health products and services which will be increasingly important as the delivery of care migrates to more cost-effective settings.”
“It has been a central component of our strategy to help enable the healthcare system by serving patients throughout the continuum of care. This acquisition further aligns us with key trends including demographic shifts and increased consumerism,” Barrett noted.
The merger is expected to boost Cardinal’s adjusted earnings by about 2 to 3 cents per share this fiscal year and by 18 cents per share in fiscal 2014.
AssuraMed operates through two separate businesses, Independence Medical and Edgepark Medical Supplies. In addition to broadening Cardinal Heath’s reach into the home, AssuraMed’s expertise in products for specific disease categories and small parcel logistics is expected to help Cardinal Health serve customers across the broad ambulatory care channel, including care sites such as physician offices and in support of home health agencies.
“We are excited about becoming part of Cardinal Health. Cardinal Health has a long tradition in providing healthcare solutions to its customers and we know this expertise will enable AssuraMed to move even farther and faster in building out our home care business," AssuraMed CEO Michael Petras said.
Once the deal closes, Cardinal Health will supply the home healthcare channel with product lines including ostomy, diabetes, insulin therapy, urological, wound care and incontinence. The company also expects to use this acquisition as a platform to begin offering a variety of its current product offerings in the direct-to-home channel.
Shares of Cardinal Health climbed nearly 2 percent early Thursday to $46.30.
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