DUBLIN, Ohio—Cardinal Health, a distributor of pharmaceuticals and specialty products, announced it has entered into definitive agreements to acquire two companies, GI Alliance (GIA) and Advanced Diabetes Supply Group (ADSG), in an effort to accelerate its growth, patient care efforts and its at-home solutions company. Additionally, the company provided confirmation of its capital deployment plans and announced its upcoming Investor Day, which take place June 12, 2025, in New York City.
“Today is an exciting day at Cardinal Health as we announce two strategic and financially compelling transactions that build upon our progress in specialty and accelerate growth in our at-home solutions business,” said Jason Hollar, CEO of Cardinal Health. “Over the past two years, we have improved operating performance and financial flexibility by executing on our focused growth strategy. These transactions enhance Cardinal Health's ability to deliver a greater value proposition for providers and patients, while representing the next step in our ongoing focus to drive sustainable shareholder value creation.”
Cardinal Health plans to acquire a majority stake in GIA, a gastroenterology (GI) management services organization, from a combination of GIA physician owners and funds managed by affiliates of Apollo, an asset management and retirement solutions provider. Cardinal Health intends to purchase its majority stake for approximately $2.8 billion in cash, which will represent 71% ownership. As a result, GIA will operate as a platform within Cardinal Health's pharmaceutical and specialty solutions segment.
GIA aims to support a complete continuum of GI care across its sites, as well as provide care in anesthesiology, pathology, infusion, radiology and clinical research. GIA currently operates a multi-specialty platform that seeks to expand in other therapeutic areas, while building upon the technology and practice capabilities acquired by Cardinal Health.
Cardinal Health also plans to acquire ADSG, a diabetic medical supplies providers, for approximately $1.1 billion in cash. Consequently, ADSG intends to merge with Cardinal Health's at-home solutions business. ADSG intends to deliver diabetes solutions tailored to support individual patients at-home, which is consistent with Cardinal Health's at-home solutions strategy. ADSG currently serves approximately 500,000 patients annually by providing innovations in diabetes therapies.
"Cardinal Health and GI Alliance are aligned in our shared vision to build a physician-led, national specialty health care platform that will be the preferred choice for all patients seeking dependable, high-quality care," said James Weber, CEO of GI Alliance. "This partnership brings together two like-minded organizations focused on delivering exceptional care and enhanced clinical and operational support for physicians that drives increased value."
"We couldn't be more excited about joining Cardinal Health at-home solutions to build on our mission of being a trusted partner in this critical space of the health care industry," said Bill Mixon, CEO of Advanced Diabetes Supply Group. "It's clear that we both share the same passion of making sure the patients we serve have the best possible outcomes. Together, we can bring more simplicity, speed and quality to patients living with diabetes and the providers who care for them."
In addition to these acquisitions, Cardinal Health reaffirmed its disciplined capital allocation framework. The company said it expects both acquisitions to close in early calendar year 2025, subject to customary closing conditions, including the receipt of required regulatory approvals. The two transactions are expected to be accretive to Cardinal Health's revenue and segment profit growth. The company expects to reflect the transactions in its fiscal year 2025 guidance upon closing. Currently, the company said it will not provide forward-looking guidance on a generally accepted accounting principles (GAAP) basis, due to certain financial information being unavailable and unable to be reasonably estimated.
"Our priorities remain unchanged: Investing in our business for growth—while preserving our investment grade credit ratings—returning capital to our shareholders and exploring strategic M&A," said Aaron Alt, chief financial officer at Cardinal Health. "We are excited for the new sources of anticipated profit growth that GI Alliance and ADSG bring to Cardinal Health, along with additional opportunities for value creation."
