Cardinal Health announced plans to buy two companies in an aim to expand its diabetes and gastroenterology businesses as part of an overall strategy to grow its footprint in specialty medicine.
The Dublin, Ohio-based company announced on November 12 that it entered into definitive agreements to acquire a majority stake in GI Alliance for $2.8 billion. Cardinal Health is acquiring 71% ownership in GI Alliance from a combination of GI Alliance physician owners and funds managed by affiliates of Apollo Global Management.
On the same day, Cardinal Health announced that it plans to buy Carlsbad, California-based Advanced Diabetes Supply Group (ADSG) for approximately $1.1 billion in cash.
Dallas-based GI Alliance is a physician-led and majority physician-owned GI practice management company providing services to more than 900 independent gastroenterologists providing care in 345 practice locations across the country. It was formed through Waud Capital Partners‘ partnership with Texas Digestive Disease Consultants in November 2018. GI Alliance will operate as a platform within Cardinal Health’s Pharmaceutical and Specialty Solutions segment.
Founded in 2002, ADSG is a national distributor of specialized diabetes supplies. The company delivers comprehensive diabetes solutions tailored to support individual patients at home. Owned by Court Square Capital Partners, ADSG includes the Advanced Diabetes Supply and United States Medical Supply brands. ADSG will merge with Cardinal Health’s at-Home Solutions business.
Cardinal Health, Inc. is an American multinational healthcare services company, and the 14th-highest revenue-generating company in the United States. Cardinal Health provides pharmaceutical and medical products and services in the United States and worldwide. The company specializes in the distribution of pharmaceuticals and medical products, serving more than 100,000 locations. The company, founded in 1971, has around 48,000 employees. According to its most recent financial report, the company generated nearly $205 billion in revenue and EBITDA of about $1.4 billion for FY 2023.
Centerview Partners served as financial advisor to Cardinal Health on the acquisition of GI Alliance. Skadden, Arps, Slate, Meagher & Flom LLP and Ropes & Gray LLP served as legal advisors.
J.P. Morgan Securities LLC served as financial advisor to Cardinal Health on the acquisition of ADSG. Skadden, Arps, Slate, Meagher & Flom LLP and DLA Piper LLP served as legal advisors in the transaction.
Bank of America Securities served as lead advisor to Cardinal Health on financing matters for both transactions. Citigroup served as financial advisor to Cardinal Health on strategic portfolio composition, including as it relates to the transactions.
According to data captured in the LevinPro HC database, the GI Alliance acquisition marks the 13th MSO transaction of 2024. There were six MSO deals announced during 2023, and seven announced during 2022.
The ADSG acquisition marks the 84th Home Health & Hospice transaction of the year, and the 19th in the durable medical equipment/respiratory home care (DME/RHC) specialty. There were 21 DME/RHC deals announced during 2023, and 19 announced during 2022.
Both deals mark Cardinal Health’s fourth and fifth deals announce during 2024, respectively. The company acquired Specialty Networks for $1.2 billion in January, Innara Health in May and Integrated Oncology Network in September.
