A billion dollar medical supply company based in Twinsburg is getting a new owner.
Cardinal Health Inc. of Dublin, Ohio, announced on Thursday that it is acquiring AssuraMed in a deal valued at about $2 billion.
AssuraMed serves more than a million patients and generates about $1 billion in annual sales to consumers through its two businesses, Independence Medical and Edgepark Medical Supplies.
The company specializes in home-delivered and wholesale medical supplies for diabetes, ostomy, wound care, urological, incontinence, respiratory and other chronic conditions.
Cardinal Health provides medical products and services to pharmacies, hospitals, outpatient surgery centers and physician offices.
“The base of our direct-to-home operations will remain in Twinsburg,” Cardinal Health spokesperson Corey Kerr said in an email.
AssuraMed has about 800 employees in Ohio.
The deal allows the central Ohio company to expand its customer base to include patients caring for medical conditions in their homes.
“AssuraMed is a natural extension of the Cardinal Health businesses and of our mission to be essential to care,” George Barrett, chair and chief executive of Cardinal Health, said in a news release. “The acquisition of this industry leader allows us to serve the growing number of Americans treated in home settings — particularly those patients recovering from acute episodes and those suffering with chronic diseases. This is a platform opportunity for Cardinal Health products and services which will be increasingly important as the delivery of care migrates to more cost-effective settings.”
Thomas Gallucci, an analyst with Lazard Capital Markets, said the deal “makes a lot of sense” strategically for Cardinal Health.
“They’ve been looking to grow their distribution scale outside of the hospital,” he said.
The announcement comes a month after AssuraMed completed the acquisition of Invacare Corp.’s Invacare Supply Group medical supplies business for $150.8 million in cash.
Cardinal Health will pay $2.07 billion for AssuraMed, or $1.94 billion not counting tax benefits it will receive from the deal. It will pay for the acquisition using $1.3 billion in new debt and $770 million in cash.
The company said it has received a commitment letter from BofA Merrill Lynch for the loan.
Cardinal Health expects the deal to close in April.
AssuraMed traces its roots to 1928, when Edgepark Surgical Inc. was founded as a community pharmacy in Garfield Heights in suburban Cleveland.
The company has been owned since 2010 by private equity firms Clayton, Dubilier & Rice and GS Capital Partners.
Cardinal Health shares rose 56 cents on Thursday to close at $46.00 per share.
The Associated Press and Bloomberg News contributed to this report. Cheryl Powell can be reached at 330-996-3902 or cpowell@thebeaconjournal.com. Follow Powell on Twitter at twitter.com/abjcherylpowell.
