DUBLIN, Ohio, March 12, 2021 /PRNewswire/ -- Cardinal
Health (NYSE: CAH) today announced that it has signed a definitive
agreement to sell its Cordis business to Hellman & Friedman
(H&F) for approximately $1
billion, which includes buyer's assumption of certain
liabilities and seller's retention of certain working capital
accounts. The transaction is expected to close in the first half of
Cardinal Health's fiscal year 2022, subject to customary closing
conditions and regulatory clearances.
"Cordis has a long history of innovation in minimally-invasive
cardiovascular technology, and we are confident that with H&F
as its owner, Cordis will be well-positioned for growth, innovation
and success," said Mike Kaufmann,
CEO of Cardinal Health. "Cardinal Health and H&F have a shared
passion for delivering high-quality medical products to customers
and we are excited about the future for the Cordis business under
H&F's ownership."
"Our decision to divest Cordis demonstrates our disciplined
approach to evaluating our portfolio and focusing our resources in
our strategic growth areas where we are an advantaged owner,"
Kaufmann continued. "Looking forward, we remain committed to our
medical distribution and global medical products businesses."
"Cordis is an excellent fit with our philosophy of investing in
great businesses as a market-leading cardiovascular device
manufacturer known for high-quality products, strong physician
satisfaction and superb patient outcomes," said Hunter Philbrick, Partner at H&F. "We are
excited to invest in the talented Cordis, Ajax and Zeus teams to
drive industry leadership, therapeutic innovation and improved
patient experiences."
"We at Ajax Health and Zeus Health are ecstatic about injecting
growth into Cordis' powerful platform, and will do so through
investments in the core business and through an independent R&D
engine – the 'Cordis Accelerator' – to develop and commercialize a
new pipeline of products exclusively for Cordis," said Duke Rohlen, CEO of Ajax Health and Zeus Health,
partners to H&F in the transaction, and Executive
Chairman-designate of Cordis and CEO of Cordis Accelerator. "We see
an unparalleled opportunity to partner with both existing Cordis
leadership and H&F to combine a best-in-class innovation engine
with a strong and robust commercial chassis. Together, we will
establish Cordis as the standard bearer for medical device
innovation."
After closing, most assets and liabilities associated with the
Cordis business will transfer to H&F. Cardinal Health will
retain full authority for lawsuits related to inferior vena cava
filters in the United States and
Canada, as well as liability
associated with these matters. Cardinal Health estimates that,
after completion of the transition services agreement, the
divestiture of the Cordis business will decrease Medical segment
profit by approximately $60 million
to $70 million on an annual run-rate
basis.
In connection with the entry into this definitive agreement,
Cardinal Health will classify the Cordis business as held for sale,
which Cardinal Health expects to result in a pre-tax loss of up to
$120 million in the third quarter of
its fiscal year 2021. Additionally, Cardinal Health was authorized
to incur costs associated with the planned divestiture of up to
$125 million, primarily in its fiscal
years 2021 and 2022.
Advisors
J.P. Morgan Securities LLC is serving as
exclusive financial advisor to Cardinal Health and Skadden, Arps,
Slate, Meagher & Flom LLP served as the company's legal
advisor. UBS Investment Bank served as the sole financial advisor
to Hellman & Friedman, with Kirkland & Ellis LLP providing
the firm's legal counsel and H&F's committed financing for the
transaction provided by Deutsche Bank Securities Inc. and UBS
Securities LLC.
About Cardinal Health
Cardinal Health is a distributor of pharmaceuticals, a global
manufacturer and distributor of medical and laboratory products,
and a provider of performance and data solutions for health care
facilities. With 50 years in business, operations in more than 40
countries and approximately 48,000 employees globally, Cardinal
Health is essential to care. Information about Cardinal Health is
available at cardinalhealth.com.
About Hellman & Friedman
Hellman & Friedman is
a preeminent global private equity firm with a distinctive approach
focused on investments in high-quality growth businesses. H&F
seeks to partner with world-class management teams where its deep
sector expertise, long-term orientation, and collaborative
partnership approach enable companies to flourish. Since its
founding in 1984, H&F has raised over $50 billion of committed capital, invested in
over 90 companies, and is currently investing its ninth fund, with
$16.5 billion of committed capital.
Learn more about H&F's defining investment philosophy and
approach to sustainable outcomes at www.hf.com.
About Ajax Health
Ajax Health seeks to identify,
support and scale disruptive technologies in the healthcare space.
Taking an active operating role, the Ajax team has a proven track
record of helping companies of all sizes, stages and structures
achieve their value-creation goals. Ajax Health is headquartered in
Menlo Park, Calif. and backed by
an investor group led by HealthQuest Capital along with Polaris
Partners and Aisling Capital. Learn more about Ajax at
www.ajaxhealth.com.
About Zeus Health
Zeus Health is a platform formed by
leading global investment firm KKR focused on investing in and
operating a portfolio of emerging medical technology companies.
Zeus Health is a continuation of the long-standing strategic
partnership between KKR and Duke
Rohlen. Zeus Health is headquartered in Menlo Park, Calif.
Contacts
Media: Sarah
Shew, sarah.shew@cardinalhealth.com and 614.553.3401;
Investors: Kevin Moran,
kevin.moran@cardinalhealth.com and 614.757.7942.
Cautions Concerning Forward-Looking Statements
This
news release contains forward-looking statements addressing
Cardinal Health's plans to divest the Cordis business and the
financial impact to Cardinal Health resulting therefrom, as well as
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 successfully complete the divestiture of
the Cordis business on a timely basis, including receipt of
required regulatory approvals and satisfaction of other conditions;
the risk that the costs associated with exit or disposal activities
or stranded costs could ultimately be greater than we currently
expect; the risk that the write-down or loss on sale of the
transferred assets could ultimately be greater than we currently
expect; and the possibility that the divestiture could result in an
impairment of our remaining Medical unit goodwill. 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 March 12, 2021. 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