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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cardinal Health Inc | NYSE:CAH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.32 | -0.32% | 98.59 | 99.70 | 98.325 | 99.42 | 1,889,760 | 01:00:00 |
By Chelsey Dulaney
Cardinal Health Inc. has agreed to buy the heart-product business of Johnson & Johnson for $1.94 billion in cash, in a move that will add stents and catheters to the list of products Cardinal offers to hospitals, physicians and ambulatory centers.
When including tax benefits, Cardinal's purchase price for Cordis drops to $1.59 billion.
Cordis makes medical devices such as stents and catheters and focuses on less-invasive treatments for vascular disease. The business had $780 million in sales in 2014, with about 70% coming from outside the U.S.
The deal comes as Cardinal, a drug wholesaler that also makes gloves and surgical apparel, works to expand its portfolio of medical products as hospitals merge and consolidate.
"As we bring more of these strategies to bear, that's going to make us increasingly important to hospitals," said Don Casey, the head of Cardinal's medical segment.
Cardinal Chief Executive George Barrett said the company is focused on medical products that have become commoditized--such as catheters and guidewires--as the potential for differentiation has become limited. Cardinal has focused its efforts on areas including wound management, cardiovascular and orthopedics in recent years.
J&J, meanwhile, is working to pare its wide-ranging portfolio to focus on higher-growth businesses and reduce costs. J&J, a pioneer in stents that prop open clogged heart arteries, said years ago that it would get out of that business.
The Wall Street Journal reported in late August that J&J was seeking a buyer for Cordis and that the business could fetch $1.5 to $2 billion in a sale.
Cardinal expects the deal to add more than 20 cents to its adjusted per-share earnings from continuing operations in its 2017 fiscal year and more thereafter.
The deal, subject to regulatory approval, is expected to close near the end of the year.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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