Cardinal Health Expands Footprint in Specialty Medicine with Planned Acquisitions
Cardinal Health, a leading pharmaceutical distributor, is set to broaden its presence in the specialty medicine sector with the upcoming acquisitions of GI Alliance (GIA) and Advanced Diabetes Supply Group (DSG).
In a strategic move, Cardinal Health will acquire a majority stake in GI Alliance, a prominent gastroenterology management services organization, from a combination of GIA physician owners and funds managed by affiliates of Apollo. The deal, valued at approximately $2.8 billion in cash, will give Cardinal Health a 71% ownership stake in GIA, which will operate as a key platform within the company’s Pharmaceutical and Specialty Solutions segment.
Simultaneously, Cardinal Health will also acquire Advanced Diabetes Supply Group, a leading provider of diabetic medical supplies, for around $1.1 billion in cash. DSG will merge with Cardinal Health’s at-Home Solutions business, enhancing its offerings in the diabetes care space.
The impact of these acquisitions is significant. GI Alliance boasts a national MSO platform with over 900 physicians across 345 practice locations in 20 states. The organization provides comprehensive gastroenterology care and offers services in anesthesiology, pathology, infusion, radiology, and clinical research. Additionally, GI Alliance operates a multispecialty platform that is expected to expand nationally and into other therapeutic areas.
On the other hand, Advanced Diabetes Supply Group specializes in delivering personalized diabetes solutions to patients at home. Serving approximately 500,000 patients annually, DSG offers innovative diabetes therapies from various manufacturers.
Both transactions are projected to contribute to Cardinal Health’s revenue and segment profit growth, as well as non-GAAP earnings per share, within the first year post-closure. The company anticipates incorporating these acquisitions into its fiscal year 2025 guidance upon completion.
These acquisitions align with Cardinal Health’s broader strategy to enhance its presence in the specialty medicine landscape. Earlier this year, the company announced its intention to acquire Integrated Oncology Network, a physician-led independent community oncology network, for over $1.1 billion in cash. This move aimed to support community healthcare providers in maintaining their independence and delivering quality care to patients.
Cardinal Health’s Pharmaceutical and Specialty Solutions segment operates one of the largest pharmaceutical supply chains in the U.S. Through its Specialty business, the company offers distribution and advanced technology solutions to community-based practices nationwide.
In a statement, Cardinal Health CEO Jason Hollar expressed enthusiasm about the acquisitions, highlighting their strategic and financial benefits. He emphasized the company’s commitment to delivering enhanced value to providers and patients while driving sustainable shareholder value creation.
As Cardinal Health continues to expand its footprint in specialty medicine, these acquisitions mark a significant step in its growth trajectory and commitment to advancing healthcare delivery.
