Cardinal Health to Acquire Generics Distributor Harvard Drug Group

Dublin, Ohio-based Cardinal Health recently announced its plans to buy generic drug distributor, The Harvard Drug Group (THDG), for $1.115 billion.

Cardinal Health said that it plans to acquire THDG, a distributor of generic pharmaceuticals, over-the-counter medications and related products to retail, institutional and alternate care customers, currently owned by Court Square Capital Partners. Cardinal Health will use existing cash and new debt to pay the $1.115 billion acquisition fee.

The acquisition will boost the drug wholesaler’s core generics business and telemarketing division. Additionally, Cardinal Health said that the deal will broaden its over-the-counter pharmaceutical products and bring specialized packaging offerings to meet the needs of hospital systems and other institutions. Livonia, Michigan-based THDG had revenue of about $450 million in 2014, and has 450 employees and two distribution facilities included in the transaction.

Cardinal Health, the second-largest US drug distributor by revenue, said that the purchase is expected to close in the year ending in June 2016. The company expects to add 15 cents per share to its adjusted earnings from continuing operations in 2016. This accretion is expected to increase by more than 20 cents in 2017, and will continue to grow in the coming years.

“The Harvard Drug Group aligns perfectly with our commitment to provide the most comprehensive line of pharmaceutical products for the broadest range of customers,” said George Barrett, chairman and chief executive officer of Cardinal Health. “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.”

Cardinal Health is also in the process of acquiring Johnson & Johnson’s Cordis business, a leader in cardiac and endovascular products, in a $1.944 billion deal.

Source: Cardinal Health

Last updated: 6/8/15; 10:25am EST

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