Cardinal Health has entered into a $400 million deal to acquire Intercare Group of the UK that would provide it with a significantly-expanded presence in the European market. The US group will also absorb $130 million-worth of debt as part of the agreement.
The UK company fits with Cardinal Health closely because, like its suitor, it offers both contract manufacturing and distribution services. Cardinal said the acquisition would strengthen its activities in Europe, where Intercare operates 19 facilites, but also add new capabilities in pre-filled syringe production and sterile manufacturing.
At present, less than 10 per cent of Cardinal's business comes from outside the USA, according to Geroge Fotiades, president and chief executive of the group's life sciences business. The company had annual revenues of more than $50 billion last year, dwarfing the $468 million sales at Intercare.
In addition, Intercare will contribute proprietary expertise in oral hormones and other potent dosage forms, as well as the Martindale speciality generics business. There will not be many opportunities for cost synergies from the acquisition, however, due largely to the different geographical reach of the two companies.
In addition to its manufacturing and distribution activities, Cardinal also makes medical supplies, pharmacy automation systems and provides packaging and marketing services for pharmaceutical manufacturers.
John Parker, the current CEO of Intercare, will assume the role of executive vice president of Cardinal Health Europe if the merger comes to fruition. He will also become non-executive chairman at the UK company.
The deal has been unanimously approved by the boards of both companies.