Cardinal Health divests its cardiovascular tech business for $1B

MedTech News: Cardinal Health announced the agreement to sell its cardiovascular technology business for approximately $1 billion.

In 2015, Cardinal Health bought the cardiovascular device manufacturer Cordis from Johnson & Johnson for $1.9 billion. The transaction with Hellman & Friedman (H&F) is expected to close in the first half of Cardinal Health’s fiscal year 2022

“Cordis has a long history of innovation in minimally-invasive cardiovascular technology, and we are confident that with H&F as its owner, Cordis will be well-positioned for growth, innovation and success,” said Mike Kaufmann, CEO of Cardinal Health. “Cardinal Health and H&F have a shared passion for delivering high-quality medical products to customers and we are excited about the future for the Cordis business under H&F’s ownership.”

“Our decision to divest Cordis demonstrates our disciplined approach to evaluating our portfolio and focusing our resources in our strategic growth areas where we are an advantaged owner,” Kaufmann continued.

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“Cordis is an excellent fit with our philosophy of investing in great businesses as a market-leading cardiovascular device manufacturer known for high-quality products, strong physician satisfaction and superb patient outcomes,” said Hunter Philbrick, Partner at H&F. “We are excited to invest in the talented Cordis, Ajax and Zeus teams to drive industry leadership, therapeutic innovation and improved patient experiences.”

“We at Ajax Health and Zeus Health are ecstatic about injecting growth into Cordis’ powerful platform, and will do so through investments in the core business and through an independent R&D engine – the ‘Cordis Accelerator’ – to develop and commercialize a new pipeline of products exclusively for Cordis,” said Duke Rohlen, CEO of Ajax Health and Zeus Health, partners to H&F in the transaction, and Executive Chairman-designate of Cordis and CEO of Cordis Accelerator.

“We see an unparalleled opportunity to partner with both existing Cordis leadership and H&F to combine a best-in-class innovation engine with a strong and robust commercial chassis. Together, we will establish Cordis as the standard bearer for medical device innovation.”

Cardinal Health estimates that the divestiture of the Cordis business will decrease Medical segment profit by approximately $60 million to $70 million on an annual run-rate basis.