Cardinal Health to buy Medtronic's medical supplies units for $6.1 bn
18 April 2017
US drug distributor Cardinal Health Inc today struck a deal to buy medical device maker Medtronic Plc's medical supplies businesses for $6.1 billion in cash in order to expand its consumable medical products portfolio.
Cardinal Health expects to fund the acquisition through a combination of $4.5 billion in new senior unsecured notes and existing cash.
Cardinal Health plans to issue long-term debt to finance the transaction and has obtained a commitment letter from Goldman Sachs Bank and Goldman Sachs Lending Partners to provide a $4.5-billion unsecured bridge loan.
Cardinal Health is acquiring Medtronic's patient care, deep vein thrombosis and nutritional insufficiency units.
The patient care, deep vein thrombosis and nutritional insufficiency units encompass 23 product categories across multiple market settings, including numerous industry-leading brands, such as Curity, Kendall, Dover, Argyle and Kangaroo, which are used in nearly every US hospital.
Total revenues of the acquired businesses were $2.3 billion for the 12 months ending October 2016 with more than 70 per cent of total sales in the US.
Post closing, the acquired units will become part of Cardinal Health's Medical segment, which is led by Don Casey, the segment's CEO.
"We are thrilled about today's announcement, as this well-established product line is complementary to our medical consumables business and fits naturally into our customer offering. For this reason, this product portfolio has been on our radar for many years," said George Barrett, chairman and CEO of Cardinal Health.
''Given the current trends in healthcare, including aging demographics and a focus on post-acute care, this industry-leading portfolio will help us further expand our scope in the operating room, in long-term care facilities and in home healthcare, reaching customers across the entire continuum of care,'' he added.