Johnson & Johnson (Photo : www.wsj.com)
In a move to expand their medical products portfolio, Cardinal Health has agreed to buy Cordis by Johnson & Johnson's for $1.94 billion.
The deal comes after hospitals merge and consolidate, and the company aims to cater to that market by providing a wide range of medical products.
Don Casey, the head of Cardinal's medical segment says, "As we bring more of these strategies to bear, that's going to make us increasingly important to hospitals."
The manufacture of stents and catheters is the prime business expertise of Cordis, wherein they focus on endovascular and cardiology devices. In 2014, the company generated $780 million, with 70 percent of sales from outside the United States, The Wall Street Journal reported. Among the 50 countries that contributed much to the sales are Germany, Italy, UK, and China.
Larry Biegelsen, analyst at New York's Well Fargo, Cardinal will face big competitors, such as Abbott Laboratories, Medtronic Plc., and Boston Scientific Corp. He also added that the management sees an opportunity to build a business involving generic medical devices.
In a report by Bloomberg, Chief executive of Cardinal Health George Barrett stated, "This is a significant step forward in our cardiovascular strategy."
Johnson & Johnson's is now focusing on high growth and reduced costs on its wide range of products. It was reported in August 2014 that the company had been looking for a buyer for Cordis. And it found a buyer in Cardinal this year.
Cardinal Health says they are hoping to close the deal in the last quarter of 2015 in the US.
