Cardinal Health acquiring Specialty Networks of Cleveland for $1.2B

The largest company in Ohio is buying a Cleveland company for $1.2 billion in cash.

Health care products and services giant Cardinal Health (NYSE: CAH) of Dublin, outside Columbus, announced early Wednesday, Jan. 31, that it has agreed to buy Specialty Networks, a multi-specialty group purchasing and practice enhancement organization, for $1.2 billion in cash.

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Specialty Network describes itself as creating "clinical and economic value for independent specialty providers and partners across multiple specialty GPOs (group purchasing organizations): UroGPO, Gastrologix and GastroGPO, and United Rheumatology." It's a portfolio company of Linden Capital Partners, a Chicago-based private equity firm focused exclusively on health care. Linden made a majority investment in Specialty Networks in late 2020.

Cardinal Health said in a statement that the acquisition will enhance its "provider-focused analytics capabilities and service offerings" while also accelerating "upstream data and research opportunities with biopharma manufacturers."

Specialty Networks’ PPS Analytics analyzes data, from sources including electronic medical records, imaging and dispensing systems and uses artificial intelligence to provide insights for providers, researchers, payers and policymakers.

Debbie Weitzman, CEO of Cardinal Health Pharmaceutical and Specialty Solutions, said in a statement that adding Specialty Networks' "unique service offerings and advanced technology solutions like PPS Analytics with our distribution partnerships and operations will enhance our value proposition for our specialty GPO members across therapeutic areas."

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Shailendra Sharma, CEO of Specialty Networks, will continue to lead the business as part of Cardinal Health

Sharma said in a statement that the companies "are united in their mission to deliver value for specialty physician practices and their patients and manufacturers with best-in-class offerings. This partnership is a strong cultural fit and a big win for physicians and patients."

The deal requires regulatory approvals. Cardinal Health said it's "expected to be accretive to non-GAAP earnings per share 12 months following close."

Cardinal Health was ranked No. 1 on Crain's most recent list of Ohio's largest public companies, with 2022 revenue of more than $181 billion. It operates in more than 30 countries and has about 48,000 employees globally.

Shares of Cardinal Health were up 0.73% in pre-market trading to $107.06, near the 52-week high of $108.85. The stock's 52-week low is $68.53.

This story first appeared in Crain's Cleveland Business.