Johnson & Johnson is selling its Cordis business to Cardinal Health for $1.944 billion in cash, or approximately $1.594 billion, net of the present value of tax benefits. The transaction is expected to close towards the end of this year.
Cordis has a portfolio containing cardiology and endovascular products, with sales of roughly $780 million, split almost evenly between the two product groups. Cordis featured on our pages recently when it was announced that the company would become exclusive distributor of the Chocolate® line of angioplasty ballooon catheters.
While the U.S. is Cordis’ largest single market, 70 percent of total sales come from outside the U.S. Cordis’ international presence includes operations in more than 50 countries, including China, Japan, Germany, Italy, France, the United Kingdom, and Brazil.
Cardinal Health clearly sees more of a fit for the Cordis business with its own than J&J does as it focuses its efforts on other cardiovascular device areas. Indeed Cardinal reckons the deal will be accretive in fiscal year 2017 and delivering synergies of $100 million by the end of 2018.
George Barrett, chairman and CEO stated; “We are extremely excited about the acquisition of Cordis. This is a significant step forward in our cardiovascular strategy. Cordis brings with it a long and proud legacy of cardiovascular innovation. This move highlights our commitment to address a major pain point in healthcare systems through innovative new approaches to the management of physician preference items. This acquisition follows a sequence of strategic moves for Cardinal Health in the areas of cardiology, wound management and orthopedics. We are well-positioned to help customers standardize around mature medical devices, while bringing them innovative solutions around supply chain management, inventory optimization, and work flow tools and data to support the most effective management of the patient.”
“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. The acquisition of Cordis reinforces our strategic position to address this need and strengthens an important growth driver in the Cardinal Health portfolio,” Barrett continued.
for Johnson & Johnson
“This initiative is part of our ongoing disciplined portfolio management approach to focus on our most promising opportunities to help patients and drive growth,” said Gary Pruden, Worldwide Chairman, Global Surgery Group, Johnson & Johnson. “Cordis has made significant contributions to the field of cardiovascular care, and we believe the business has a promising future with Cardinal Health, a company with which we have a long-standing relationship. We are grateful for the many contributions that Cordis employees have made over the years.”
Source: Cardinal Health, Johnson & Johnson