Pharmaceuticals distributor Cardinal Health has signed an agreement to divest its Cordis medical device business to private equity firm Hellman & Friedman (H&F) for approximately $1bn.
The company acquired Cordis, which develops and manufactures cardiology and endovascular technology, from Johnson & Johnson in 2015.
Upon completion of the deal, H&F will assume most of the Cordis assets and liabilities while Cardinal Health will retain full authority for lawsuits related to Cordis’ inferior vena cava filters in the US and Canada along with its liability associated with these filters.
H&F partner Hunter Philbrick said: “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.
“We are excited to invest in the talented Cordis, Ajax and Zeus teams to drive industry leadership, therapeutic innovation and improved patient experiences.”
Cardinal Health estimates that the sale of its Cordis business will reduce its medical segment annual profits by about $60m to $70m on an annual run-rate basis.
Additionally, the company plans to classify the business as held for sale and expects a pre-tax loss of up to $120m in the third quarter of this year.
Cardinal Health CEO Mike Kaufmann said: “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.”
Subject to customary closing conditions and regulatory clearances, the acquisition is expected to be concluded in the first half of next year.