Healthcare products manufacturer Cardinal Health, Dublin, Ohio, today provided additional financial details on its plan to spin off its clinical and medical products business into a separate, publicly traded company called CareFusion Corp.
Under the plan, according to documents filed with the Securities and Exchange Commission, CareFusion would assume $1.4 billion of Cardinals current $3.7 billion debt burden following the July 1 spinoff. The arrangement calls for CareFusion to take out a $1.9 billion bridge loan and use part of the cash to pay a $1.4 billion dividend to Cardinal. Cardinal, in turn, will use the money to pay down a portion of its current debt.
Cardinal also plans to use an additional $200 million of its own cash to help pay down its debt. The company expects to have roughly $2.1 billion in outstanding debt following the transaction. Cardinal plans to maintain a 20% equity stake in CareFusion following the spinoff, accord to the SEC filing.