On Tuesday, Medtronic PLC announced a new agreement to divest some of its product assets to Cardinal Health Inc. Cardinal will now sell Medtronic’s Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses which are part of Medtronic’s Minimally Invasive Therapies Group Patient Monitoring and Recovery division. This transaction is expected to close within Medtronic PLC’s second fiscal quarter of 2018.. Of course, the sale is subject to customary regulatory approval as well as achieving various satisfactory customary closing conditions.
The plan has an estimated value of about $6.1 billion and includes 17 dedicated manufacturing facilities.
Cardinal Health, of course, is based out of Dublin, OH but remains a global, integrated healthcare services and products company. They provide customized solutions for hospitals, health systems, and several other types of medical clinical entities around the world.
Medtronic reports that the business it is selling to Cardinal Health generated roughly $2.4 billion in revenue within the previous four reported quarters
“These products — while truly meaningful to patients in need — are best suited under ownership that can provide the investment and focus that these businesses require,” explains Medtronic chief executive Omar Ishrak. “At the same time, we can put these proceeds to work, investing over the long-term in higher returning internal and external opportunities.”
In addition, Cardinal Health chief executive George Barrett notes, “This industry-leading portfolio will help us further expand our scope in the operating room, in long-term care facilities and in home health care.”
More specifically, the divested product lines include things within the categories of dental health, chart paper, incontinence, animal health, electrodes, and wound care, among several others.
Medtronic will not be giving up, however, its respiratory and monitoring products—to include: ventilators and certain monitors—as well as its renal care solutions sector.
Ishrak continues, “This is a positive transaction for all involved – Medtronic, Cardinal Health, and our respective shareholders and employees – who we believe will all thrive under this change in ownership. In addition, it signifies our commitment to disciplined portfolio management.”
He notes, “Medtronic has had a specific focus over the past several years on ensuring that we are delivering compelling clinical and economic value to health systems and patients around the world. Ultimately, we came to the conclusion that these products – while truly meaningful to patients in need – are best suited under ownership that can provide the investment and focus that these businesses require.”