Cardinal Health buying Harvard Drug for $1.12B
Cardinal Health (CAH) plans to acquire The Harvard Drug Group in a $1.12 billion cash and debt deal designed to expand its distribution of generic drugs, the company said Friday.
Ohio-based Cardinal Health predicted the acquisition of the Michigan-headquartered firm now owned by private equity firm Court Square Capital Partners would add more than 15 cents to earnings per share in fiscal year 2016.
Based on the transaction, Cardinal Health issued preliminary financial guidance for the company's fiscal 2016, forecasting that earnings per share from continuing operations would range from $4.75 to $5.05
Cardinal Health shares closed up 0.49% Friday at $88.04 after rebounding from an earlier decline.
The Harvard Drug Group, one of the nation's largest suppliers of prescription and over-the-counter medications and related products, had approximately $450 million in 2014 revenue. The company has 450 employees and two distribution facilities involved in the acquisition.
Along with the boost to its generic business, Cardinal Health said the deal would expand its existing telesales programs and capability, broaden its portfolio of over-the-counter drugs, and bring specialized packaging offerings designed to meet the needs of hospital systems and other medical institutions.
"The Harvard Drug Group aligns perfectly with our commitment to provide the most comprehensive line of pharmaceutical products for the broadest range of customers," George Barrett, Cardinal Health's CEO and chairman, said in a statement issued with the deal announcement.
"This acquisition enhances our ability to support retail and institutional customers and further utilizes Red Oak, our joint venture with CVS Health to source generics," said Barrett.
Jones Day advised on the transaction, the second announced by Cardinal Health this year. The company in March said it would acquire Johnson & Johnson's Cordis business, a leader in cardiac and endovascular products, in a $1.944 billion cash acquisition.
Cardinal Health said it plans to issue $1.5 billion in new debt to help finance the two deals.