Johnson & Johnson Announces Completion Of Cordis Divestiture To Cardinal Health

(RTTNews) - Johnson & Johnson (JNJ) announced the completion of the divestiture of its Cordis business to Cardinal Health (CAH) for an approximate value of $2 billion, subject to customary adjustments.

As previously announced, Cardinal Health expects the acquisition of Cordis to be slightly dilutive to its fiscal 2016 non-GAAP diluted earnings per share from continuing operations. The company expects fiscal 2017 accretion in non-GAAP diluted EPS of greater than $0.20 per share, inclusive of the cost of an incremental $0.07-$0.08 per share of interest expense associated with transaction financing, and for the acquisition to be increasingly accretive thereafter.

Cardinal Health continues to assume that synergies will exceed $100 million annually exiting fiscal 2018.

Cordis had annual sales in calendar year 2014 of approximately $780 million, split almost evenly between cardiology and endovascular products. Cordis is a global company with a growing portfolio of products and talented people serving health care systems throughout the world. While the U.S. is its largest single market, 70 percent of total sales come from outside the U.S. Cordis' international presence includes operations in China, Japan, Germany, Italy, France, the United Kingdom, and Brazil, among others.

Cardinal Health stated that Integration teams have been engaged since the acquisition announcement in March 2015, and the integration process is off to a successful start. David J. Wilson remains as Cordis worldwide president, and other executives are in place across all functions and regions. This includes the Cordis team based in the San Francisco Bay Area, which will remain in the current location. In addition, global headquarters and a Europe, Middle East and Africa hub have been established in Zug, Switzerland. Singapore will serve as the Asia-Pacific hub, and Puerto Rico will serve as the Latin American hub.

Approximately 3,000 employees will be joining Cardinal Health when all integration work and transitions are completed over the next few years.

The business will report to Don Casey, Cardinal Health's Medical segment chief executive officer, a medical device industry veteran, and a former Johnson & Johnson executive.