Cardinal Health To Acquire Two Companies To Accelerate Strategic Growth And Enhance Patient Care

(RTTNews) - Cardinal Health (CAH) announced that it has reached definitive agreements to acquire two companies, bolstering its strategic growth initiatives and further improving patient care.

Cardinal Health noted that it 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 (APO). Cardinal Health will purchase its majority stake for approximately $2.8 billion in cash, which will represent 71% ownership. GIA will operate as a platform within Cardinal Health's Pharmaceutical and Specialty Solutions segment.

Cardinal Health will also acquire the Advanced Diabetes Supply Group (ADSG), diabetic medical supplies provider, for approximately $1.1 billion in cash. ADSG will merge with Cardinal Health's at-Home Solutions business.

Cardinal Health expects both the GIA and ADSG acquisitions to close in early calendar year 2025. The two transactions are expected to be accretive to Cardinal Health's revenue and segment profit growth, and to non-GAAP earnings per share, in the first 12 months following close.

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.

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 $2.9 billion to fund these acquisitions.