Cardinal Health to Buy Medical-Supplies Provider AssuraMed for $2.07 Billion

02/14/2013| 08:08am US/Eastern

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   By Melodie Warner 
 

Cardinal Health Inc. (>> Cardinal Health, Inc.) agreed to acquire closely held medical-supplies provider AssuraMed for $2.07 billion as the drug wholesaler looks to diversify its offerings.

AssuraMed currently serves more than one million patients nationally with more than 30,000 products. The company bought Invacare Corp.'s (>> Invacare Corporation) domestic medical supplies business for $150 million last month. Including that business, Cardinal Heath said AssuraMed had 2012 revenue of $1 billion.

After the transaction is complete, Cardinal Health will supply ostomy, diabetes, insulin therapy, urological, wound care and incontinence products to the home-healthcare market.

"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 Chairman and Chief Executive George Barrett.

Cardinal Health expects AssuraMed to add two cents to three cents a share to its fiscal 2013 adjusted earnings, assuming the deal closes by early April.

The company also estimates its will boost fiscal 2014 adjusted earnings by at least 18 cents a share.

Cardinal has previously disclosed the loss of its contract with pharmacy-benefits manager Express Scripts Holding Co. (>> Express Scripts Holding Co) to rival AmerisourceBergen Corp. (>> AmerisourceBergen Corp.). Two of Cardinal's huge drug-distribution customers, Walgreen Co. (>> Walgreen Company) and CVS Caremark Corp. (>> CVS Caremark Corporation), have contracts set to end this summer.

The company earlier this month reported its fiscal second-quarter earnings rose 16% as improved margins helped to offset weaker revenue at its pharmaceutical division, which was caused partly by generic-drug introductions.

Shares closed Wednesday at $45.44 and were inactive premarket. The stock has risen 8% over the past year.

Write to Melodie Warner at melodie.warner@dowjones.com

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