Cardinal Health Purchases The Harvard Drug Group For $1.115 Billion

Cardinal Health Inc CAH has agreed that it will purchase The Harvard Drug Group, a privately held generics company, in a deal valued at $1.115 billion, using cash and existing debt. Cardinal Health added that the deal should boost fiscal year 2016 earnings by more than 15 cents per share, increasing outlook from $4.75 to $5.05.

Cardinal Health shares closed at $87.61 on Thursday’s close, down about half a percentage for the day. The stock is down 61 cents to $87.00 in Friday’s pre-market session, partly due to some high volume trading that occurred just 10 minutes before Thursday’s close, shooting the stock up from $87.33 to $87.61(0.32 percent increase).

The acquisition will allow Cardinal Health to add to its existing line of over-the-counter drugs along with expanding its generic distribution business and its telesales capabilities. With the new deal, Cardinal may expand its offerings to hospitals nationwide.

The Harvard Drug Group reported 2014 revenues of $450 million alongside its 450 employees and two distribution facilities.

Expect some increased volume trading action in the healthcare sector following the acquisition, specifically, McKesson Corporation MCK, AmerisourceBergen Corporation ABC, Prestige Brands Holdings Inc PBH, and PharMerica Corporation PMC.

Cardinal Health shares are up nearly 9 percent year-to-date.