Cardinal Health said on Monday it will take a majority stake in gastroenterology care platform GI Alliance (GIA) and buy diabetes medicine provider Advanced Diabetes Supply Group (ADSG) in two deals worth about $3.9 billion in total.
According to a report by news agency Reuters, Cardinal Health said it would buy a 71% stake in GIA from a combination of physician owners and funds managed by affiliates of Apollo Global Management for about $2.8 billion in cash, expanding into gastroenterology.
The group will buy ADSG, which home delivers diabetes supplies, for about $1.1 billion from private equity firm Court Square Capital Partners in a deal that will expand its at-home solutions business, Reuters reported.
Cardinal Health continues its billion-dollar acquisition spree this year amid a trend of healthcare service companies diversifying beyond drug distribution. The group bought community cancer center operator Integrated Oncology Network for $1.12 billion and Specialty Networks for $1.2 billion earlier this year.
Reportedly, the GIA deal will help Cardinal Health also add to its specialty offerings such as oncology and rheumatology, which became part of its portfolio through acquisitions this year.
Cardinal said it expects both the deals to add to its revenue, segment profit growth and profit 12 months after closing. Earlier this month, the company raised its fiscal 2025 adjusted profit forecast as strong demand for costly specialty medicines and branded drugs drove sales at its pharmaceuticals unit.
Cardinal Health said it has the ability to exercise a right to purchase 100% of GIA from the third year after the deal’s closing, which is expected in early 2025.
(With inputs from Reuters)
