$1.115 billion deal to expand generic drug distribution, OTC businesses
Cardinal said Friday that it will use cash and new debt to finance the transaction, which is expected to close in the beginning of its 2016 fiscal year, pending regulatory approvals and other customary closing conditions.
Based in Livonia, Mich., The Harvard Drug Group is a distributor of generic drugs, over-the-counter medicines and related products to retail, institutional and alternate care customers. The company had revenue of about $450 million last year. The acquisition includes 450 employees and two distribution facilities.
Cardinal noted that besides adding to its generic drug distribution business, the acquisition of THDG expands Cardinal’s telesales programs and capabilities as well as its portfolio of OTC products. THDG also brings specialized packaging offerings to meet the needs of hospital systems and other institutions.
“The Harvard Drug Group aligns perfectly with our commitment to provide the most comprehensive line of pharmaceutical products for the broadest range of customers,” Cardinal Health chairman and chief executive officer George Barrett said in a statement. “This acquisition enhances our ability to support retail and institutional customers and further utilizes Red Oak, our joint venture with CVS Health to source generics.”
The purchase of THDG marks Cardinal’s second acquisition this year. In March, the company announced a $1.944 billion deal to buy Johnson & Johnson’s Cordis, a global manufacturer of cardiology and endovascular devices.
Last week, Cardinal said its binding offer to acquire Cordis was formally accepted, and the transaction is slated to close in the United States and key non-U.S. countries towards the end of 2015, pending regulatory clearances and other customary closing conditions.
Fremont, Calif.-based Cordis had 2014 sales of approximately $780 million. The United States is its largest single market, but 70% of total sales come from overseas. Cordis’ has operations in more than 50 countries, including China, Japan, Germany, Italy, France, the United Kingdom and Brazil.