Leading distributor of pharmaceuticals and medical supplies
) recently revealed that it has accomplished the takeover of
AssuraMed, a privately held provider of medical supplies for
patients in the residential setting, for $2.07 billion. Cardinal
Health funded the takeover through a mixture of $1.3 billion in
fresh unsecured senior notes and cash.
AssuraMed provides over 30,000 items to over a million
individuals across the nation. It had sales of about $1 billion
in calendar 2012. The company functions through two major units,
Edgepark and Independence Medical. The acquisition of AssuraMed
will increase Cardinal Health's penetration in the home segment.
It will also enable the company to furnish a complete set of
pharmacy and medical equipment offerings to clients in the home
Cardinal Health is ranked among the Fortune 500 companies.
With about $100 billion in annual sales, the company remains one
of the largest distributors of pharmaceuticals and medical
supplies in the U.S., with a diversified product portfolio, which
may partly insulate it from economic fluctuations.
Cardinal Health stands to gain from the gradual shift in mix
from bulk to the higher margin non-bulk sector of the
Pharmaceutical segment. Its mainstay Pharmaceutical segment is
heavily influenced by the generic wave. Overall, Cardinal Health
is benefiting from a spate of tuck-in acquisitions and capital
deployment strategies. The company continues to deploy capital to
boost investor confidence via share repurchases and dividend
hikes. However, Cardinal Health faces tough competition across
all its business segments, which may continue to pressure pricing
Cardinal Health currently carries a Zacks Rank #3 (Hold).
Rite Aid Corporation
) both carry a Zacks Rank #1 (Strong Boy) and are expected to do
well. In addition,
CVS Caremark Corporation
) has a Zacks Rank #2 (Buy) and warrants a look.
CARDINAL HEALTH (CAH): Free Stock Analysis
CVS CAREMARK CP (CVS): Free Stock Analysis
PHARMERICA CORP (PMC): Free Stock Analysis
RITE AID CORP (RAD): Free Stock Analysis
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