Pharmaceuticals distributor Cardinal Health has announced two agreements, worth $3.9bn, to acquire GI Alliance (GIA) and Advanced Diabetes Supply Group (ADSG).
These acquisitions are expected to boost its strategic growth and improve patient care. The company also confirmed its capital deployment plans.
Under the first agreement, Cardinal Health will acquire a majority stake in GI Alliance, a gastroenterology (GI) management services organisation (MSO) in the US.
The acquisition, valued at approximately $2.8bn in cash, will give Cardinal Health 71% ownership.
GI Alliance has over 900 physicians across 345 locations in 20 states in the US. It provides comprehensive care, including anaesthesiology, pathology, and clinical research, and supports 135 ambulatory surgical centres and 165 hospital networks.
The company will join Cardinal Health’s Pharmaceutical and Speciality Solutions segment to create a scaled multi-specialty managed-services platform to benefit physicians and patients.
GI Alliance CEO James Weber said: “Cardinal Health and GI Alliance are aligned in our shared vision to build a physician-led, national speciality healthcare platform that will be the preferred choice for all patients seeking dependable, high-quality care.
“This partnership brings together two like-minded organisations focused on delivering exceptional care and enhanced clinical and operational support for physicians that drives increased value.”
As per the second deal, Cardinal Health will acquire ADSG, a provider of personalised diabetic medical supplies, for approximately $1.1bn in cash.
ADSG serves about 500,000 patients annually, offering the latest diabetes therapies from manufacturers. This supports the growing demand for specialised care in the diabetes patient population.
ADSG will merge with Cardinal Health’s at-Home Solutions business.
Cardinal Health CEO Jason Hollar said: “Over the past two years, we have improved operating performance and financial flexibility by executing on our focused growth strategy.
“These transactions enhance Cardinal Health’s ability to deliver a greater value proposition for providers and patients, while representing the next step in our ongoing focus to drive sustainable shareholder value creation.”
Cardinal Health expects to complete the GIA and ADSG acquisitions in early 2025, pending customary closing conditions and regulatory approvals.
The latest deals follow Cardinal Health’s announcement to acquire community cancer centre operator Integrated Oncology Network (ION) for $1.115bn in September this year.
In March 2021, the company agreed to sell its Cordis business to Hellman & Friedman (H&F) for about $1bn.
