DUBLIN, Ohio, July 30, 2017 /PRNewswire/ -- Cardinal Health
(NYSE: CAH) today announced that it has completed the acquisition
of Medtronic's Patient Care, Deep Vein Thrombosis and Nutritional
Insufficiency business for $6.1
billion. The acquisition was funded with a combination of
$4.5 billion in new senior unsecured
notes, existing cash and borrowings under our existing credit
arrangements.
"This business provides our customers with more product
offerings and includes some well-established brands that fit
naturally within our portfolio and are complementary to our current
medical products business. We know these products and many of the
employees well, and have seen that our team members share a common
commitment to quality, customer service and the patients who we all
ultimately serve," said George
Barrett, chairman and CEO of Cardinal Health. "We are
extremely excited about welcoming our new colleagues from around
the world to Cardinal Health."
The Patient Care, Deep Vein Thrombosis and Nutritional
Insufficiency business encompasses 23 product categories across
multiple market sites of care, including numerous industry-leading
brands, such as Curity, Kendall, Dover, Argyle and Kangaroo –
brands used in nearly every U.S. hospital.
The company also previously announced that it expects
the acquisition to be accretive to non-GAAP¹ diluted
earnings per share from continuing operations by more
than $0.21 per share in fiscal 2018, net of incremental
annual financing-related interest expense, and includes up
to $100 million of inventory step-up costs during
the first few quarters following closing. As previously disclosed,
the company still expects the acquisition to be accretive to
non-GAAP diluted earnings per share by more than $0.55 per share in fiscal 2019, and increasingly
accretive thereafter. By the end of fiscal 2020, the company
assumes synergies will exceed $150 million.
The Patient Care, Deep Vein Thrombosis and Nutritional
Insufficiency business will become part of Cardinal Health's
Medical segment, which is led by Don
Casey, the segment's chief executive officer. Integration
efforts are off to a successful start and it is expected that all
integration work and transitions will be completed over the next 18
months.
Goldman, Sachs & Co. and Perella Weinberg Partners LP served
as Cardinal Health's financial advisors on this transaction, and
Skadden, Arps, Slate, Meagher & Flom LLP and Jones Day served as its legal advisors.
Non-GAAP financial measures (including footnote)
Footnote (1) Expected accretion to non-GAAP diluted earnings per
share from continuing operations reflects: (A) earnings from
continuing operations, excluding (1) LIFO charges/(credits), (2)
restructuring and employee severance, (3) amortization and
acquisition-related costs, (4) impairments and (gain)/loss on
disposal of assets, (5) litigation (recoveries)/charges, net, and
(6) loss on extinguishment of debt, each net of tax, (B) divided by
diluted weighted average shares outstanding.
Cardinal Health presents non-GAAP diluted earnings per share
from continuing operations on a forward-looking basis. The most
directly comparable forward-looking GAAP measure is diluted
earnings per share from continuing operations. Cardinal Health is
unable to provide a quantitative reconciliation of this
forward-looking non-GAAP measure to the most directly comparable
forward-looking GAAP measure, because Cardinal Health cannot
reliably forecast LIFO charges/(credits), restructuring and
employee severance, amortization and acquisition-related costs
(which Cardinal Health expects to increase significantly as a
result of the acquisition of the Patient Care, Deep Vein Thrombosis
and Nutritional Insufficiency businesses), impairments and
(gain)/loss on disposal of assets and litigation
(recoveries)/charges, net, which are difficult to predict and
estimate. Please note that the unavailable reconciling items could
significantly impact Cardinal Health's future financial results.
These items could cause earnings per share and the accretion to
earnings per share to differ materially from the company's non-GAAP
expectations.
About Cardinal Health
Cardinal Health Inc. is a global, integrated healthcare services
and products company, providing customized solutions for hospital
systems, pharmacies, ambulatory surgery centers, clinical
laboratories and physician offices worldwide. The company provides
clinically-proven medical products and pharmaceuticals and
cost-effective solutions that enhance supply chain efficiency.
Cardinal Health connects patients, providers, payers, pharmacists
and manufacturers for integrated care coordination and better
patient management. With the acquisition of Medtronic's Patient
Care, Deep Vein Thrombosis and Nutritional Insufficiency business
the company will have approximately 50,000 employees in nearly 60
countries. Cardinal Health ranks among the top 15 on the Fortune
500. For more information, visit cardinalhealth.com, follow
@CardinalHealth on Twitter and connect on LinkedIn at
linkedin.com/company/cardinal-health.
Cautions Concerning Forward-Looking Statements
This release contains forward-looking statements addressing
Cardinal Health's plans to acquire Medtronic's Patient Care, Deep
Vein Thrombosis and Nutritional Insufficiency businesses and other
statements about future expectations, prospects, estimates and
other matters that are dependent upon future events or
developments. These statements may be identified by words such as
"expect," "anticipate," "intend," "plan," "believe," "will,"
"should," "could," "would," "project," "continue," "likely," and
similar expressions, and include statements reflecting future
results, trends or guidance, statements of outlook and expense
accruals. These matters are subject to risks and uncertainties that
could cause actual results to differ materially from those
projected, anticipated or implied. These risks and uncertainties
include: the ability to retain the acquired businesses' customers
and employees, the ability to successfully integrate the acquired
businesses into Cardinal Health's operations, and the ability to
achieve the expected synergies as well as accretion in earnings;
competitive pressures in Cardinal Health's various lines of
business; the amount or rate of generic and branded pharmaceutical
price appreciation or deflation and the timing of and benefit from
generic pharmaceutical introductions; the ability to maintain the
benefits from the generic sourcing venture with CVS Health; the
risk of non-renewal or a default under one or more key customer or
supplier arrangements or changes to the terms of or level of
purchases under those arrangements; uncertainties due to government
health care reform including proposals to modify or repeal the
Affordable Care Act; uncertainties with respect to U.S. tax or
trade laws, including proposals relating to a "border adjustment
tax" or new import tariffs; changes in the distribution patterns or
reimbursement rates for health care products and services; the
effects of any investigation or action by any regulatory authority;
and changes in foreign currency rates and the cost of commodities
such as oil-based resins, cotton, latex and diesel fuel. Cardinal
Health is subject to additional risks and uncertainties described
in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports and
exhibits to those reports. This release reflects management's views
as of July 31, 2017. Except to the
extent required by applicable law, Cardinal Health undertakes no
obligation to update or revise any forward-looking
statement.
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SOURCE Cardinal Health