Cardinal Health Bolsters Specialty Offering With $1.2 Billion Acquisition

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Cardinal Health announced Wednesday that it will acquire Specialty Networks for $1.2 billion in cash, strengthening the healthcare giant’s services for specialty physician practices. Specialty Networks provides technology-enabled group purchasing, practice management solutions, and data analytics to over 11,500 specialty providers across key areas like urology, rheumatology, and gastroenterology.

The deal enhances Cardinal Health’s capabilities in strategically important specialty areas while expanding its platform serving independent physicians. Here are some key details on the acquisition:

Expanding Service Offerings

Specialty Networks gives Cardinal Health new clinical and economic services to offer specialty physicians and practices. Its analytics platform, PPS Analytics, taps into electronic medical records, imaging systems, and other data sources to generate insights improving patient care and outcomes.

Cardinal gains Specialty Networks’ expertise optimizing specialty practice operations and finance. And through group purchasing relationships Specialty Networks facilitates, Cardinal Health can provide access to discounted products and services.

The combined specialty offerings will aim to boost efficiency, revenues, and coordination of care for specialty providers. This strengthens Cardinal’s value proposition as a distribution and services partner.

Supporting Independent Physicians

A key aspect is Specialty Networks’ focus on independent and community-based specialty practices. With over 1,200 physician practice customers, it expands Cardinal’s reach and understanding of this critical healthcare segment.

The medical landscape is increasingly consolidated, making it more vital for Cardinal Health to support independent practices’ success. Specialty Networks’ experience and technology assets aid in this aim.

Cardinal Health can also leverage Specialty Networks’ physician expertise and relationships to accelerate development of its Navista Network. This network assists independent community oncologists with practice solutions and clinical trials access.

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Enhanced Analytics and Insights

Specialty Networks’ rich specialty patient data and analytics capabilities will enhance Cardinal’s offerings. Its PPS Analytics platform mines electronic records and images using artificial intelligence to generate diagnostic and treatment insights.

Cardinal gains access to millions of longitudinal specialty patient data points. This strengthens its real-world evidence and insights for biopharma partners on the safety, efficacy and use of therapies.

The specialty data and analytics also aid population health management and value-based care initiatives. And they support Cardinal’s direct provider services like improved medication adherence programs.

Driving Growth in Key Areas

Specialty Networks expands Cardinal’s presence and cross-selling opportunities in strategic specialty therapeutic areas:

  • Urology – large patient population with ongoing and acute care needs
  • Rheumatology – fast growing with new advanced treatments
  • Gastroenterology – increasing prevalence of GI diseases

These are growth priorities where Specialty Networks strengthens Cardinal’s advantages. The deal accelerates Cardinal’s specialty growth plans through enhanced resources and newly integrated offerings.

Strong Cultural and Strategic Fit

Cardinal Health and Specialty Networks share a mission to bring value to physician practices while improving patient outcomes. Keeping Specialty Networks’ management team intact ensures continuity of its culture and physician focus.

The companies also have experience collaborating, as Specialty Networks is already a Cardinal Health specialty GPO partner. This makes integration of the businesses more seamless.

The acquisition is expected to be accretive to Cardinal’s non-GAAP earnings per share within 12 months post closing. Specialty Networks gives Cardinal Health a stronger specialty platform and differentiated assets to better serve practices and patients. Combining specialized expertise and technologies, the deal creates benefits for physicians and Cardinal Health alike.


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