Cardinal Health to Acquire Cordis, A Worldwide Leader in Cardiac and Endovascular Medical Products for $1.944 Billion …

Significantly advances Cardinal Health's offering of interventional cardiology and endovascular solutions for integrated health systems and their patients

Creates immediate global scale and scope

Fiscal 2017, first full post-close year, accretion is expected to be greater than $0.20 in non-GAAP diluted earnings per share from continuing operations; increasingly accretive thereafter

DUBLIN, Ohio Cardinal Health today announced plans to acquire Johnson Johnson's Cordis business, a leading global manufacturer of cardiology and endovascular devices, for $1.944 billion in cash, or approximately $1.594 billion, net of the present value of tax benefits. The acquisition is expected to be financed with a combination of $1.0 billion in new senior unsecured notes and the remainder with existing cash. The transaction is expected to close in the United States and key non-U.S. countries towards the end of calendar 2015.

Assuming this timing, Cardinal Health expects fiscal 2017 accretion in non-GAAP diluted earnings per share (EPS(1)) from continuing operations of greater than $0.20 per share, which includes the cost of an incremental $0.07-$0.08 per share of interest expense associated with financing the transaction. The company expects the acquisition to be increasingly accretive thereafter and assumes that synergies will exceed $100 million annually by the end of fiscal 2018.

Headquartered in Fremont, Calif., Cordis had annual sales in 2014 of approximately $780 million, split almost evenly between cardiology and endovascular products. Cordis is a global company with a growing portfolio of products and talented people serving healthcare systems throughout the world. While the U.S. is the largest single market, 70 percent of total sales come from outside the U.S. Cordis' international presence includes operations in more than 50 countries, including China, Japan, Germany, Italy, France, the United Kingdom, and Brazil.

"We are extremely excited about the acquisition of Cordis. This is a significant step forward in our cardiovascular strategy. Cordis brings with it a long and proud legacy of cardiovascular innovation. This move highlights our commitment to address a major pain point in healthcare systems through innovative new approaches to the management of physician preference items. This acquisition follows a sequence of strategic moves for Cardinal Health in the areas of cardiology, wound management and orthopedics. We are well-positioned to help customers standardize around mature medical devices, while bringing them innovative solutions around supply chain management, inventory optimization, and work flow tools and data to support the most effective management of the patient," said George Barrett, chairman and CEO.

"With an aging population and the accompanying demand for less invasive medical treatments, health systems around the world are searching for the best way to bring quality care to their patients in the most cost-effective way. The acquisition of Cordis reinforces our strategic position to address this need and strengthens an important growth driver in the Cardinal Health portfolio," Barrett continued.

Once the transaction is complete, the business will report to Don Casey, Cardinal Health's Medical Segment chief executive officer and a medical device industry veteran.

Casey noted that Cardinal Health and Cordis have complementary skills and expertise, creating a combined talent base that will be world class in cardiovascular solutions. "We look forward to drawing heavily on the knowledge and innovative spirit of Cordis team members around the world. Additionally, Cordis' global expertise and footprint provide an exciting opportunity to leverage scale in sourcing and manufacturing," said Casey.

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Cardinal Health to Acquire Cordis, A Worldwide Leader in Cardiac and Endovascular Medical Products for $1.944 Billion ...