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Cardinal Health
today announced
plans to acquire privately held AssuraMed, a leading provider of medical
supplies to patients in the home, for $2.07 billion, or $1.94 billion, net of
the present value of tax benefits. The acquisition will be financed with a
combination of $1.3 billion in new senior unsecured notes and the remainder in
cash. The transaction is expected to close by early April 2013.
"AssuraMed is a natural extension of the Cardinal Health businesses and of our
mission to be essential to care. The acquisition of this industry leader
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. 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," said George Barrett, chairman
and chief executive officer of Cardinal Health.
"It has been a central component of our strategy to help enable the health
care 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. "AssuraMed has an outstanding
management team, a mission closely aligned with ours, and a track record of
extraordinary customer service and outstanding financial performance. We will
be very excited to welcome the AssuraMed team to the Cardinal Health
organization."
Assuming the transaction closes by early April 2013, Cardinal Health expects
accretion of $.02 - $.03 to its existing non-GAAP fiscal 2013 earnings per
share guidance range. For fiscal 2014, the company estimates non-GAAP EPS
accretion of at least $.18 per share, including the cost of an incremental
$.08 - $.09 per share of interest expense associated with financing the
transaction. The company did not provide the preliminary estimates of the
impact of the transaction on fiscal 2013 and 2014 GAAP EPS since the impact is
dependent on the timing of the closing and final valuation of intangible
assets. Cardinal Health expects the amortization of acquisition-related
intangible assets, which are excluded from its non-GAAP EPS, to be a
significant expense in fiscal 2013 and 2014.
With annual sales in calendar year 2012 of approximately $1 billion, which
includes the sales of the recently acquired Invacare Supply Group, AssuraMed
currently serves more than 1 million patients nationally with more than 30,000
products. The company 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 will significantly enhance
Cardinal Health's ability to service customers across the broad ambulatory
care channel, including care sites such as physician offices and in support of
home health agencies. This will also allow Cardinal Health to provide a
comprehensive solution for integrated delivery network, retail pharmacy and
medical equipment provider customers, who are currently delivering services to
the home. The AssuraMed acquisition will also bring additional value to these
customers through medical billing expertise and a comprehensive set of
relationships with commercial and government payors.
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