Cardinal Health has entered definitive agreements to acquire a majority stake in GI Alliance, a gastroenterology management services organization, and the entirety of Advanced Diabetes Supply Group, a diabetes medical equipment supplier.
Cardinal expects to acquire Advanced Diabetes Supply for an estimated $1.1 billion and 71% ownership of GI Alliance for an estimated $2.8 billion. Both deals are expected to close by early 2025, pending regulatory approvals.
Related: Cardinal Health to acquire Integrated Oncology Network for $1.1B
GI Alliance would operate under Cardinal's pharmaceutical and specialty solutions segment and Advanced Diabetes Supply Group would become part of Cardinal at-Home under the respective agreements, the company said in a news release Tuesday.
"Combining [Advanced Diabetes Supply Group] and Cardinal Health will bring important [simplicity] and efficiencies for patients so they can get the supplies they need, exactly when and where they need them," a spokesperson for Cardinal Health said in an email Tuesday. "Regarding GI Alliance, combining their already-scaled [management services organization] platform and leadership in gastroenterology with Cardinal Health’s national scale and industry experience across specialty therapeutic areas will enhance Cardinal Health’s ability to support the success of specialty providers."
The transactions advance the pharmaceutical and medical supply company's strategy to grow its specialty care business. In September, Cardinal Health said it planned to acquire Nashville, Tennessee-based Integrated Oncology Network for $1.12 billion by the end of 2024, pending regulatory approval. If the deal is approved, Integrated Oncology would become part of Cardinal Health's oncology practice alliance Navista.
In March, Cardinal completed its acquisition of Cleveland-based Specialty Networks, a multispecialty group purchasing company, which was folded into its pharmaceutical and specialty solutions segment.
The two agreements announced Tuesday resulted in an updated outlook from Fitch Ratings from positive to stable due to an increase in potential debt, according to a news release from the ratings agency.
GI Alliance and Advanced Diabetes Supply did not immediately respond to requests for comment. Cardinal Health declined to respond to questions about what will happen with current GI Alliance and Advanced Diabetes Supply employees under the new agreements or about the Fitch Ratings outlook update.
