Cardinal Health (NYSE: CAH) announced the signing of definitive agreements to acquire two key companies that align with its growth strategy and will enhance patient care. The acquisitions include a majority stake in GI Alliance (GIA), a leading gastroenterology management services organization (MSO), and Advanced Diabetes Supply Group (ADSG), a prominent provider of diabetes medical supplies. Both acquisitions are expected to accelerate Cardinal Health’s presence in specialty care and at-home solutions.
Acquisition Details
Cardinal Health will acquire a 71% majority stake in GI Alliance for approximately $2.8 billion. GIA, with over 900 physicians and 345 practice locations across 20 states, will be integrated into Cardinal Health’s Pharmaceutical and Specialty Solutions segment. Additionally, Cardinal Health will acquire ADSG for approximately $1.1 billion, which will merge with the company’s at-Home Solutions business.
“These transactions mark an exciting milestone for Cardinal Health as we continue to drive growth in our Specialty and at-Home Solutions businesses,” said Jason Hollar, CEO of Cardinal Health. “The partnerships with GI Alliance and ADSG expand our capabilities in providing high-quality care, enhance our offerings for both providers and patients, and drive value creation for our shareholders.”
GI Alliance: Expanding Specialty Care
GI Alliance is a national leader in gastroenterology care, providing a full continuum of services including anesthesiology, pathology, infusion, radiology, and clinical research. The platform serves a wide network of physicians and is integrated into over 135 ambulatory surgical centers and 165 hospital networks. This acquisition strengthens Cardinal Health’s national specialty platform, following its earlier acquisitions of Specialty Networks and Integrated Oncology Network.
“Partnering with Cardinal Health will enable GI Alliance to further expand its national reach and deepen its expertise in gastroenterology care,” said Dr. James Weber, CEO of GI Alliance. “We share Cardinal Health’s vision to create a physician-led, patient-focused healthcare platform that delivers exceptional care.”
Advanced Diabetes Supply Group: Enhancing At-Home Solutions
ADSG is a leading provider of diabetes medical supplies, supporting approximately 500,000 patients annually. The acquisition aligns with Cardinal Health’s strategy to grow its at-Home Solutions business, which focuses on providing essential healthcare services directly to patients’ homes. By integrating ADSG’s expertise and resources, Cardinal Health will enhance its ability to support the growing number of diabetes patients and improve patient outcomes.
“Joining Cardinal Health will enable ADSG to continue innovating and providing the highest quality care to diabetes patients at home,” said Bill Mixon, CEO of ADSG. “Together, we’ll simplify diabetes management and deliver faster, more efficient services to both patients and healthcare providers.”
Capital Deployment and Financial Outlook
Cardinal Health plans to finance the acquisitions using a combination of cash on hand and new debt financing. The company expects the transactions to close in early 2025, pending regulatory approval, and anticipates the acquisitions will be accretive to revenue, segment profit growth, and non-GAAP earnings per share (EPS) within the first 12 months.
“We remain committed to investing in strategic growth areas while maintaining our investment-grade credit ratings and delivering shareholder value,” said Aaron Alt, CFO of Cardinal Health. “These acquisitions create exciting new opportunities for growth and value creation across our business.”
In addition, Cardinal Health will have the option to purchase the remaining equity in GI Alliance starting three years after the deal closes, further solidifying its commitment to expanding its specialty business.
About Cardinal Health
Cardinal Health provides healthcare services and products to improve patient care. With a focus on enhancing patient outcomes through innovative solutions, Cardinal Health delivers integrated healthcare solutions across a range of specialties, including pharmaceuticals, medical products, and at-home care.
About GI Alliance
GI Alliance is a leading gastroenterology management services organization that brings together top-tier physicians and care providers across the U.S. to deliver exceptional, patient-centered care.
About Advanced Diabetes Supply Group
Advanced Diabetes Supply Group is a leading provider of diabetes supplies and services, specializing in delivering high-quality, at-home diabetes care solutions.
