Cardinal Health (CAH) has announced definitive agreements to acquire two companies, enhancing its strategic growth initiatives and improving patient care.
The company will secure a majority stake in GI Alliance (GIA), the preeminent gastroenterology management services organization (MSO) in the U.S. This acquisition involves purchasing interests from GIA physician owners and funds associated with Apollo (APO). Cardinal Health will invest approximately $2.8 billion in cash to obtain 71% ownership. Following the acquisition, GIA will operate within Cardinal Health's Pharmaceutical and Specialty Solutions segment.
Additionally, Cardinal Health is set to acquire the Advanced Diabetes Supply Group (ADSG), a provider of diabetes medical supplies, for roughly $1.1 billion in cash. This acquisition will integrate ADSG into Cardinal Health's at-Home Solutions business.
Both acquisitions are projected to finalize in early 2025. They are expected to contribute positively to Cardinal Health's revenue and segment profit growth, as well as non-GAAP earnings per share, within the first year post-acquisition.
To finance these transactions, Cardinal Health plans to utilize available cash and secure new debt financing. The company aims to strategically reduce this debt over the next 18 to 24 months, without altering its previously stated share repurchase plans for fiscal year 2025.
Cardinal Health has secured a commitment letter from Bank of America to provide a 364-day senior unsecured bridge loan facility, totaling up to $2.9 billion, to facilitate these acquisitions.
