Cardinal Health announces two strategic additions to its portfolio
Cardinal Health (NYSE: CAH) announced two strategic acquisitions: a 71% stake in GI Alliance (GIA) for $2.8 billion and Advanced Diabetes Supply Group (ADSG) for $1.1 billion. GIA, the leading gastroenterology management services organization with over 900 physicians across 345 locations, will operate within Cardinal's Pharmaceutical and Specialty Solutions segment. ADSG, serving approximately 500,000 diabetes patients annually, will merge with Cardinal's at-Home Solutions business. Both acquisitions are expected to close in early 2025 and be accretive to revenue, segment profit growth, and non-GAAP EPS in the first 12 months post-closing.
Cardinal Health (NYSE: CAH) ha annunciato due acquisizioni strategiche: una partecipazione del 71% in GI Alliance (GIA) per 2,8 miliardi di dollari e Advanced Diabetes Supply Group (ADSG) per 1,1 miliardi di dollari. GIA, l'organizzazione leader nei servizi di gestione gastroenterologica con oltre 900 medici in 345 sedi, opererà all'interno del segmento Soluzioni Farmaceutiche e Specialistiche di Cardinal. ADSG, che serve circa 500.000 pazienti diabetici all'anno, si fonderà con il business Soluzioni a Domicilio di Cardinal. Si prevede che entrambe le acquisizioni si chiuderanno all'inizio del 2025 e saranno positive per le entrate, la crescita del profitto del segmento e l'EPS non-GAAP nei primi 12 mesi successivi alla chiusura.
Cardinal Health (NYSE: CAH) anunció dos adquisiciones estratégicas: una participación del 71% en GI Alliance (GIA) por 2,8 mil millones de dólares y Advanced Diabetes Supply Group (ADSG) por 1,1 mil millones de dólares. GIA, la organización líder en servicios de gestión gastroenterológica con más de 900 médicos en 345 ubicaciones, operará dentro del segmento de Soluciones Farmacéuticas y Especializadas de Cardinal. ADSG, que atiende a aproximadamente 500,000 pacientes diabéticos anualmente, se fusionará con el negocio de Soluciones en el Hogar de Cardinal. Se espera que ambas adquisiciones se completen a principios de 2025 y contribuyan a los ingresos, al crecimiento del beneficio del segmento y al EPS no-GAAP en los primeros 12 meses posteriores al cierre.
카르디널 헬스 (NYSE: CAH)는 두 가지 전략적 인수를 발표했습니다: GI 얼라이언스(GIA)의 71% 지분을 28억 달러에 인수하고, 고급 당뇨병 공급 그룹(ADSG)을 11억 달러에 인수합니다. GIA는 345개 위치에서 900명이 넘는 의사가 활동하는 선도적인 소화기 관리 서비스 조직으로, 카르디널의 제약 및 전문 솔루션 부문 내에서 운영될 것입니다. ADSG는 연간 약 50만 명의 당뇨병 환자에게 서비스를 제공하며, 카르디널의 홈 솔루션 사업과 통합될 것입니다. 두 인수 모두 2025년 초에 완료될 것으로 예상되며, 수익, 부문 이익 성장 및 비-GAAP EPS에 긍정적인 영향을 미칠 것입니다.
Cardinal Health (NYSE: CAH) a annoncé deux acquisitions stratégiques : une participation de 71 % dans GI Alliance (GIA) pour 2,8 milliards de dollars et Advanced Diabetes Supply Group (ADSG) pour 1,1 milliard de dollars. GIA, le premier organisme de services de gestion en gastroentérologie avec plus de 900 médecins répartis sur 345 sites, opérera dans le segment des Solutions Pharmaceutiques et Spécialisées de Cardinal. ADSG, qui sert environ 500 000 patients diabétiques chaque année, fusionnera avec l'entreprise de Solutions à Domicile de Cardinal. Les deux acquisitions devraient être finalisées début 2025 et contribuer à l'augmentation des revenus, à la croissance du bénéfice segmenté et au BPA non-GAAP au cours des 12 premiers mois suivant la clôture.
Cardinal Health (NYSE: CAH) gab bekannt, dass zwei strategische Übernahmen getätigt werden: ein 71%iger Anteil an GI Alliance (GIA) für 2,8 Milliarden Dollar und Advanced Diabetes Supply Group (ADSG) für 1,1 Milliarden Dollar. GIA, die führende Organisation für das Management von Gastroenterologie-Dienstleistungen mit über 900 Ärzten an 345 Standorten, wird im Segment Pharmazeutische und Speziallösungen von Cardinal tätig sein. ADSG, das jährlich etwa 500.000 Diabetes-Patienten betreut, wird mit dem Home Solutions-Geschäft von Cardinal fusionieren. Es wird erwartet, dass beide Übernahmen Anfang 2025 abgeschlossen werden und positive Auswirkungen auf Umsatz, Segmentgewinnwachstum und Non-GAAP-EPS in den ersten 12 Monaten nach dem Abschluss haben werden.
- Strategic acquisition of 71% stake in GI Alliance for $2.8B, expanding specialty care presence
- Acquisition of ADSG for $1.1B strengthening at-Home Solutions segment
- Both acquisitions expected to be accretive to revenue and earnings in first 12 months
- GIA brings network of 900+ physicians across 345 locations in 20 states
- ADSG adds 500,000 annual patient base to diabetes care segment
- Significant cash outlay of $3.9B total for both acquisitions
- Regulatory approval pending for both transactions
Insights
These strategic acquisitions worth a combined
Both acquisitions are expected to be accretive to revenue, segment profit growth and non-GAAP EPS within the first year post-closing. The deals align with Cardinal Health's strategic focus on high-growth areas and demonstrate strong capital deployment toward expanding market presence in specialty healthcare services. The transactions leverage existing infrastructure while adding complementary capabilities that should drive operational synergies and enhance competitive positioning.
These acquisitions position Cardinal Health strategically in two rapidly growing healthcare segments. The GI Alliance deal creates a powerful multi-specialty platform that complements recent acquisitions in urology, rheumatology and oncology services. This vertical integration strategy allows CAH to capture more value across the specialty care delivery chain while gaining significant market presence in gastroenterology.
The ADSG acquisition is particularly noteworthy as diabetes care represents a massive growth opportunity. With an aging population and rising diabetes prevalence, the at-home medical supplies market is projected for sustained expansion. This move strengthens CAH's direct-to-patient capabilities and creates opportunities for cross-selling and enhanced patient services.
- Acquisition of a majority stake in GI Alliance, the country's leading gastroenterology management services organization, to accelerate Cardinal Health's multi-specialty growth strategy
- Acquisition of the Advanced Diabetes Supply Group, a leading national direct-to-patient provider of diabetes medical supplies, to accelerate Cardinal Health's at-Home Solutions growth strategy
- Company announces plan to hold Investor Day in June 2025
Cardinal Health will acquire a majority stake in GI Alliance (GIA), the country's leading gastroenterology (GI) management services organization (MSO), from a combination of GIA physician owners and funds managed by affiliates of Apollo (NYSE: APO). Cardinal Health will purchase its majority stake for approximately
Cardinal Health will also acquire the Advanced Diabetes Supply Group (ADSG), one of the country's leading diabetic medical supplies providers, for approximately
"Today is an exciting day at Cardinal Health as we announce two strategic and financially compelling transactions that build upon our progress in Specialty and accelerate growth in our at-Home Solutions business," said Jason Hollar, Chief Executive Officer, Cardinal Health. "Over the past two years, we have improved operating performance and financial flexibility by executing on our focused growth strategy. These transactions enhance Cardinal Health's ability to deliver a greater value proposition for providers and patients, while representing the next step in our ongoing focus to drive sustainable shareholder value creation."
GI Alliance: the leading GI management services organization and a foundation of Cardinal Health's multi-specialty platform for further growth
GI Alliance's leading national MSO platform includes over 900 physicians across 345 practice locations in 20 states, with extensive reach into the local communities they serve. GIA supports a complete continuum of gastroenterology care across its member sites, with significant additional depth in anesthesiology, pathology, infusion, radiology and clinical research. GIA-affiliated doctors treat patients in 135 ambulatory surgical centers and 165 hospital networks, supported by 95 infusion centers.
GI Alliance operates a multi-specialty platform that will further expand both nationally and in other key therapeutic areas, while building upon the technology and specialty practice capabilities acquired by Cardinal Health in the previously announced acquisitions of Specialty Networks (urology, GI, rheumatology) and Integrated Oncology Network (medical oncology, radiation oncology, urology).
"Growing our Specialty business is our top priority," said Hollar. "By partnering the GIA MSO platform and leadership in gastroenterology with our own national presence and specialty experience, GI Alliance and Cardinal Health together create a meaningful platform that will deliver great results for patients and providers. We are excited to welcome James Weber, M.D., and his team to the Cardinal Health family."
"Cardinal Health and GI Alliance are aligned in our shared vision to build a physician-led, national specialty healthcare platform that will be the preferred choice for all patients seeking dependable, high-quality care," said James Weber, M.D., Chief Executive Officer, GI Alliance. "This partnership brings together two like-minded organizations focused on delivering exceptional care and enhanced clinical and operational support for physicians that drives increased value."
The Advanced Diabetes Supply Group: a leading national direct-to-patient diabetes medical supplies provider that enhances capabilities to service patients in their homes
Advanced Diabetes Supply Group delivers comprehensive diabetes solutions that are tailored to support individual patients at-home, consistent with Cardinal Health's at-Home Solutions strategy to support this rapidly growing patient population. ADSG serves approximately 500,000 patients annually by providing the latest innovations in diabetes therapies from leading manufacturers.
"Last January, we elevated the priority of investing in our growth businesses like at-Home Solutions because this is exactly where the future of healthcare is going," said Hollar. "Like at-Home Solutions, ADSG has a proven track record for leading this industry with innovation, knowledge and unparalleled commitment to patients. We're confident that the highly synergistic combination will enhance our ability to take advantage of positive industry trends and drive further growth, deliver on our promise of exceptional service and solutions to customers, and create shareholder value."
"We couldn't be more excited about joining Cardinal Health at-Home Solutions to build on our mission of being a trusted partner in this critical space of the healthcare industry," said Bill Mixon, Chief Executive Officer, Advanced Diabetes Supply Group. "It's clear that we both share the same passion of making sure the patients we serve have the best possible outcomes. Together, we can bring more simplicity, speed and quality to patients living with diabetes and the providers who care for them."
Capital Deployment
Cardinal Health reaffirmed its disciplined capital allocation framework. The company expects both the GIA and ADSG acquisitions to close in early calendar year 2025, subject to customary closing conditions, including the receipt of required regulatory approvals. The two transactions are expected to be accretive to Cardinal Health's revenue and segment profit growth, and to non-GAAP earnings per share (EPS), in the first 12 months following close. The company expects to reflect the transactions in its fiscal year 2025 guidance upon closing. Cardinal Health does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated.
Including the acquisition of Integrated Oncology Network, which remains on track to close by the end of the calendar year, the company intends to finance the announced transactions with a combination of cash on hand and new debt financing. Cardinal Health plans to take a focused approach to pay down debt over the next 18 to 24 months. The company does not expect its deleveraging plans to change its previously outlined share repurchases for fiscal year 2025.
"Our priorities remain unchanged: investing in our business for growth, while preserving our investment grade credit ratings, returning capital to our shareholders and exploring strategic M&A," said Aaron Alt, Chief Financial Officer, Cardinal Health. "We are excited for the new sources of anticipated profit growth that GI Alliance and ADSG bring to Cardinal Health, along with additional opportunities for value creation."
Beginning on the third anniversary of GIA's closing, Cardinal Health has the ability to exercise a call right to purchase up to
In connection with the acquisition agreements, the company entered into a commitment letter with Bank of America, pursuant to which Bank of America has committed to provide a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of up to
2025 Investor Day
Cardinal Health plans to host an Investor Day on June 12, 2025, in
Webcast
Cardinal Health will host a webcast Tuesday at 8:45 AM ET to discuss the transactions. To access the webcast and corresponding slide presentation, go to the Investor Relations page at ir.cardinalhealth.com. No access code is required. Presentation slides and a webcast replay will be available on the Investor Relations page for 12 months.
Advisors
Centerview Partners served as financial advisor to Cardinal Health on the acquisition of GI Alliance. Skadden, Arps, Slate, Meagher & Flom LLP and Ropes & Gray LLP served as legal advisors. J.P. Morgan Securities LLC served as financial advisor to Cardinal Health on the acquisition of ADSG. Skadden, Arps, Slate, Meagher & Flom LLP and DLA Piper LLP served as legal advisors. Bank of America Securities served as lead advisor on financing matters. Citi served as financial advisor to Cardinal Health on strategic portfolio composition, including as it relates to the transactions.
About Cardinal Health
Cardinal Health is a distributor of pharmaceuticals and specialty products; a global manufacturer and distributor of medical and laboratory products; a supplier of home-health and direct-to-patient products and services; an operator of nuclear pharmacies and manufacturing facilities; and a provider of performance and data solutions. Our company's customer-centric focus drives continuous improvement and leads to innovative solutions that improve people's lives every day. Learn more about Cardinal Health at cardinalhealth.com and in our Newsroom.
About GI Alliance
GI Alliance is the leading, physician-led, majority physician owned network for gastrointestinal care in
About the Advanced Diabetes Supply® Group
Founded in 2002, the Advanced Diabetes Supply® Group (ADSG) is a leading national distributor of specialized diabetes supplies. Owned by Court Square Capital Partners, ADSG is made up of the Advanced Diabetes Supply (ADS) and United States Medical Supply (US MED) brands, both of which share a vision to be one of the nation's premier diabetes equipment suppliers. Visit www.northcoastmed.com and www.usmed.com for more information.
Contacts
Media: Erich Timmerman, Erich.Timmerman@cardinalhealth.com and (614) 553-3853
Investors: Matt Sims, Matt.Sims@cardinalhealth.com and (614) 553-3661
Cautions Concerning Forward-Looking Statements
This news release contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," "likely," and similar expressions, and include statements reflecting future results or guidance, statements of outlook, and various accruals and estimates. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties include risks associated with our planned acquisitions of GIA and ADSG, including the risk that we may not receive required regulatory approval or otherwise fail to complete one or both of the acquisitions and the risk that we may fail to realize the anticipated strategic and financial benefits of the acquisitions. Cardinal Health is subject to additional risks and uncertainties described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports. This news release reflects management's views as of November 11, 2024. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement. Forward-looking statements are aspirational and not guarantees or promises that goals, targets or projections will be met, and no assurance can be given that any commitment, expectation, initiative or plan in this news release can or will be achieved or completed.
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SOURCE Cardinal Health
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