Cardinal Health Agrees to Sell Contract Services Unit to The Blackstone Group for $3.3 Billion - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

Cardinal Health Agrees to Sell Contract Services Unit to The Blackstone Group for $3.3 Billion


ePT--the Electronic Newsletter of Pharmaceutical Technology

Dublin, Ohio (Jan. 25)—Cardinal Health (www.cardinal.com) agreed to sell its contract services unit, Pharmaceutical Technologies and Services (PTS), to The Blackstone Group (New York, NY, www.blackstone.com) for roughly $3.3 billion in cash. Blackstone is acquiring the PTS businesses that develop, manufacture, and package medication and other products for the pharmaceutical and biotechnology industries. The PTS segment employs roughly 10,000 at more than 30 facilities worldwide and generates $1.8 billion in annual revenue.

Cardinal Health had announced in November 2006 its plans to divest the PTS segment.

“We made very rapid progress in less than two months to reach an agreement with such a quality organization as The Blackstone Group,” said R. Kerry Clark, president and CEO of Cardinal Health, in a prepared statement. “The move allows us to accelerate the repurchase of Cardinal Health shares and focus our full attention on our mission to help make health care safer and more productive through our supply-chain and clinical products businesses.”

Cardinal Health plans to use the net proceeds from the sale to repurchase shares. The sale is expected to generate roughly $3.1 billion in after-tax proceeds. The net book value of the PTS segment is about $2 billion. The sale is expected to close early in Cardinal Health's fiscal fourth quarter and is subject to customary closing conditions, including regulatory approvals.

Cardinal Health's decision to sell the PTS segment is part of the company's strategy to focus resources on its four remaining segments serving health-care provider customers, such as hospitals and pharmacies. Cardinal Health is retaining Martindale and Beckloff Associates, two businesses that support the generic pharmaceutical market. Martindale develops generic, intravenous medicines that are complementary to Cardinal Health's hospital business and generics strategy. Beckloff provides pharmaceutical regulatory consulting, including services for Cardinal Health generic products. Combined, these businesses have approximately 400 employees at two primary locations in the United States and United Kingdom.

The Blackstone Group is a global private investment and advisory firm. It investments in pharmaceuticals include a stake in Emcure Pharmaceuticals Limited (Pune, India, www.emcure.co.in), a vertically integrated pharmaceutical company based in India, and Gerresheimer (Duesseldorf, Germany, www.gerresheimer.com), a pharmaceutical packaging company.

Cardinal Health agrees to acquire SpecialtyScripts Pharmacy

In another move, Cardinal agreed to acquire SpecialtyScripts Pharmacy (Fall River, MA, www.specialtyscripts.com) to broaden its specialty pharmaceutical service offerings. With the acquisition, Cardinal Health intends to develop services for pharmaceutical manufacturers that complement the company’s existing portfolio of nuclear pharmacies, third-party logistics offerings, and distribution services for blood and plasma products.  The acquisition is expected to close in the third quarter. Financial terms were not disclosed.

ADVERTISEMENT

blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
|Monthly
| Weekly

Survey
What role should the US government play in the current Ebola outbreak?
Finance development of drugs to treat/prevent disease.
Oversee medical treatment of patients in the US.
Provide treatment for patients globally.
All of the above.
No government involvement in patient treatment or drug development.
Finance development of drugs to treat/prevent disease.
24%
Oversee medical treatment of patients in the US.
12%
Provide treatment for patients globally.
10%
All of the above.
44%
No government involvement in patient treatment or drug development.
10%
Jim Miller Outsourcing Outlook Jim MillerCMO Industry Thins Out
Cynthia Challener, PhD Ingredients Insider Cynthia ChallenerFluorination Remains Key Challenge in API Synthesis
Marilyn E. Morris Guest EditorialMarilyn E. MorrisBolstering Graduate Education and Research Programs
Jill Wechsler Regulatory Watch Jill Wechsler Biopharma Manufacturers Respond to Ebola Crisis
Sean Milmo European Regulatory WatchSean MilmoHarmonizing Marketing Approval of Generic Drugs in Europe
FDA Reorganization to Promote Drug Quality
FDA Readies Quality Metrics Measures
New FDA Team to Spur Modern Drug Manufacturing
From Generics to Supergenerics
CMOs and the Track-and-Trace Race: Are You Engaged Yet?
Source: ePT--the Electronic Newsletter of Pharmaceutical Technology,
Click here