Cardinal Health, headquartered in Dublin, Ohio, announced on Thursday its plans to acquire AssuraMed, a privately held provider of medical supplies to patients receiving in-home care, 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, with the transaction expected to close by early April 2013.
“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 CEO of Cardinal Health, in a statement.
Providing patients with a continuum of care services is a “central component” of Cardinal Health’s strategy, Barrett said, and the AssuraMed acquisition aligns the company with key trends toward increased consumerism and a growing senior population.
Assuming the transaction closes by early April, Cardinal Health expects accretion of $0.02 – $0.03 to its existing non-GAAP fiscal 2013 earnings per share guidance range.
For fiscal year 2014, the company estimates non-GAAP EPS accretion of at least $0.18 per share, including the cost of an incremental $0.08-$0.09 per share of interest expense associated with financing the transaction.
AssuraMed, which currently serves more than 1 million patients with more than 30,000 products throughout the nation, had annual sales of about $1 billion in calendar year 2012, including the sales of the recently acquired Invacare Supply Group.
The company operates through two separate businesses, Independence Medical and Edgepark Medical Supplies. Cardinal Health’s acquisition of AssuraMed not only broadens its reach into the home, but enhances its ability to service customers across the broad ambulatory care channel thanks to AssuraMed’s experience with products for specific disease categories and small parcel logistics.
The acquisition also provides Cardinal Health with the ability to offer a comprehensive solution for integrated delivery network, retail pharmacy, and medical equipment provider customers, who are currently delivering services to the home. Once the transaction is complete, Cardinal Health will supply the home health care channel with product lines including ostomy, diabetes, insulin therapy, urological, wound four, and incontinence.
Written by Alyssa Gerace