Cardinal Health to sell $1.8 bn pharmaceutical technologies segment

Cardinal Health, a leading provider of products and services supporting the healthcare industry, is to divest its Pharmaceutical Technologies and Services (PTS) segment. The business manufactures or packages 100 billion doses of medication every year for pharmaceutical and biotech firms.

This part of the business currently employs around 10,000 people at more than 30 facilities worldwide and generates $1.8 billion in revenue. The company said the decision was made to focus Cardinal Health's capabilities and resources to better serve healthcare provider customers, such as hospitals and pharmacies.

"In the coming years, Cardinal Health will focus more on our products and services that help providers improve the safety and productivity of health care," said Kerry Clark, president and ceo of Cardinal Health.

The company expects to use the proceeds to repurchase Cardinal Health shares.

Cardinal Health will retain Martindale and Beckloff Associates, two businesses that support the generic pharmaceutical market. Martindale develops generic, intravenous medicine that is complementary to Cardinal Health's hospital business and generics strategy. Beckloff provides regulatory consulting services, including for Cardinal Health generic products.

PTS is the leading contract manufacturing and service provider for the pharmaceutical industry. As a standalone company excluding Martindale and Beckloff, Cardinal Health estimates the business would generate in excess of $300m in earnings before interest, taxes, depreciation and amortization. Among its core offerings, it develops and manufactures oral and sterile medication in nearly all dosage forms, and holds patents for softgel and Zydis fast-dissolve technologies used in many popular prescription and over-the-counter medicine. The segment is also the largest contract packager of pharmaceuticals.