By Chelsey Dulaney
Cardinal Health Inc. agreed to acquire the heart-product
business from Johnson & Johnson for $1.94 billion in cash, in a
move aimed at strengthening its cardiology efforts.
When including tax benefits, Cardinal's purchase price for
Cordis drops to $1.594 billion.
Cordis makes medical devices such as stents and catheters and
focuses on less-invasive treatments for vascular disease. The
business had $780 million in sales in 2014, with about 70% coming
from outside the U.S.
The deal comes as Cardinal, a drug wholesaler, looks to boost
its cardiovascular efforts, and J&J works to pare its
wide-ranging portfolio to focus on higher-growth businesses and
reduce costs. J&J, a pioneer in stents that prop open clogged
heart arteries, said years ago that it would get out of that
business.
The Wall Street Journal reported in late August that J&J was
seeking a buyer for Cordis and that the business could fetch $1.5
to $2 billion in a sale.
"With an aging population and the accompanying demand for less
invasive medical treatments, health systems around the world are
searching for the best way to bring quality care to their patients
in the most cost-effective way," said Cardinal Health Chief
Executive George Barrett in a news release.
Cardinal expects the deal to add more than 20 cents to its
adjusted per-share earnings from continuing operations in its 2017
fiscal year and more thereafter.
The deal, subject to regulatory approval, is expected to close
near the end of the year.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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