Cardinal Health 2015 Annual Report Download - page 30

Business
29 Cardinal Health | Fiscal 2015 Form 10-K
Medical Segment
Our Medical segment distributes a broad range of national brand and
our own Cardinal Health brand medical, surgical and laboratory
products and provides services to hospitals, ambulatory surgery
centers, clinical laboratories and other healthcare providers in the
United States, Canada and China and to patients in the home in the
United States through our Cardinal Health at Home division. During
fiscal 2015, we entered into an agreement with Henry Schein, Inc.
to consolidate our physician office organization into Henry Schein,
Inc. as part of a broader commercial relationship.
This segment also manufactures, sources and develops our own
higher-margin, Cardinal Health brand medical and surgical products.
Manufactured products include: single-use surgical drapes, gowns
and apparel; exam and surgical gloves; fluid suction and collection
systems; cardiovascular products; wound care products; and
orthopedic products. We will expand this segment's product line to
include the cardiac and endovascular products manufactured by
Cordis once our acquisition of Cordis, which is discussed elsewhere
in this Form 10-K, is completed. We expect to continue to expand
our manufactured products through acquisitions and internal
development. Our manufactured products are sold directly or through
third-party distributors in the United States, Canada, Europe and
other regions internationally.
This segment also assembles and offers sterile and non-sterile
procedure kits. In addition, the segment provides supply chain
services, including spend management, distribution management
and inventory management services, to healthcare providers.
See Note 15 of the “Notes to Consolidated Financial Statements” for
Medical segment revenue, profit and assets for fiscal 2015, 2014 and
2013.
Acquisitions
We have acquired a number of businesses over the last several years
that have enhanced our core strategic areas of generics, health
systems and hospital solutions (including manufactured medical
products), specialty pharmaceutical products and services,
international and alternate sites of care. We expect to continue to
pursue additional acquisitions in the future.
Since July 1, 2010, we have completed, or expect to complete, the
following six larger acquisitions:
Date Company Location Line of Business
Acquisition
Price
(in millions)
Pending Cordis business of
Johnson &
Johnson
Fremont, CA Cardiac and
endovascular
products
$ 1,944
07/15 The Harvard Drug
Group Livonia, MI Pharmaceutical product
distribution
$ 1,115
03/13 AssuraMed, Inc. Twinsburg, OH Medical
product
distribution
$ 2,070
12/10 Kinray, Inc. Whitestone, NY Pharmaceutical
product
distribution
$ 1,336
11/10 Yong Yu Shanghai, China Pharmaceutical
and medical
product
distribution
$ 458 (1)
07/10 Healthcare
Solutions
Holding, LLC
Ellicott City, MD Specialty
pharmaceutical
services
$ 520 (2)
(1) Includes the assumption of approximately $57 million in debt.
(2) Includes $506 million in cash paid on the acquisition date and $14 million paid
in fiscal 2012 and 2013 in connection with a contingent consideration obligation.
The contingent consideration obligation had an acquisition date fair value of
$92 million.
In addition, we completed several smaller acquisitions during the last
five fiscal years, including in fiscal 2015, Tradex International, Inc.,
a supplier of disposable gloves, and Metro Medical Supply, Inc., a
distributor of specialty pharmaceuticals and medical and surgical
products; in fiscal 2014, Access Closure, Inc., a manufacturer and
distributor of extravascular closure devices; and in fiscal 2012,
Futuremed Healthcare Products Corporation, a Canadian medical
product distributor.