Cardinal Health to Acquire The Harvard Drug Group for $1.115 Billion

June 5, 2015

Cardinal Health today announced plans to acquire The Harvard Drug Group, a distributor of generic pharmaceuticals, over-the-counter medications.

PRESS RELEASE

DUBLIN, Ohio, June 5, 2015 —Cardinal Health today announced plans to acquire The Harvard Drug Group (THDG), a distributor of generic pharmaceuticals, over-the-counter medications and related products to retail, institutional and alternate care customers. THDG is currently owned by Court Square Capital Partners. Cardinal Health will pay $1.115 billion using existing cash and new debt. The transaction is expected to close in the beginning of fiscal year 2016 subject to regulatory approvals and other customary closing conditions.

Assuming this timing, Cardinal Health expects accretion in non-GAAP diluted earnings per share (EPS) from continuing operations of greater than $0.15 per share in fiscal 2016, net of the $0.03 to $0.04 per share of interest expense for the related debt financing. Cardinal Health expects accretion in non-GAAP diluted EPS of more than $0.20 in fiscal 2017 and for accretion to be increasingly greater thereafter.

In addition to enhancing the company’s generic pharmaceutical distribution business, the acquisition expands Cardinal Health’s existing telesales programs and capabilities; broadens the company’s portfolio of over-the counter pharmaceutical products; and brings specialized packaging offerings to meet the needs of hospital systems and other institutions.

Headquartered in Livonia, Mich., The Harvard Drug Group had revenues of approximately $450 million in 2014. There are 450 employees and two distribution facilities included in the transaction.

“The Harvard Drug Group aligns perfectly with our commitment to provide the most comprehensive line of pharmaceutical products for the broadest range of customers,” said George Barrett, chairman and chief executive officer of Cardinal Health. “This acquisition enhances our ability to support retail and institutional customers and further utilizes Red Oak, our joint venture with CVS Health to source generics.”