Cardinal Health to buy NY pharma distributor Kinray for $1.3 Billion

DUBLIN, Ohio, Nov. 18, 2010 /PRNewswire-FirstCall/ -- Cardinal Health (NYSE: CAH) today announced plans to acquire Kinray, Inc., a leading pharmaceutical distributor serving the New York metropolitan area, for $1.3 billion in an all-cash transaction that will significantly expand its ability to serve retail independent pharmacies in the northeastern United States.
Cardinal Health expects the transaction to be neutral to slightly accretive to non-GAAP earnings in fiscal 2011, depending on the timing of the closing. The company estimates accretion in fiscal 2012 of at least $0.12 in non-GAAP earnings per share from continuing operations(1), including the impact of amortization of intangibles. This estimate is dependent on the timing of the closing and final valuation of intangibles.
"Adding Kinray to the Cardinal Health Pharmaceutical Segment portfolio will enable us to build on our increasing presence in community pharmacy and accelerate our growth in this important channel," said George Barrett, chairman and chief executive officer of Cardinal Health. "We are excited to have the Kinray employees join the Cardinal Health family, and we look forward to their contributions. Kinray has a long-standing service tradition with its customers. We intend to continue that tradition, utilizing its customer expertise and Whitestone distribution facility, while creating additional value for its customers through branded pharmaceutical programs, inventory and pharmacy management tools and Cardinal Health's extensive generic drug program."
With annual sales in excess of $3.5 billion, Kinray currently serves more than 2,000 retail independent pharmacy customers as a distributor of both branded and generic pharmaceuticals. The company primarily serves the New York metropolitan area and will establish a stronger platform for Cardinal Health in the northeastern U.S. The addition of Kinray will continue to diversify and broaden Cardinal Health's customer mix by increasing the company's retail independent pharmacy base by 40 percent to approximately 7,000 total customers. Subject to customary closing conditions and regulatory approvals, Cardinal Health plans to complete the transaction by the end of the calendar year or early in 2011.
"Joining forces with Cardinal Health supports Kinray's mission to help retail independent pharmacies serve as an integral provider of care for our evolving health care system," said Stewart Rahr, president and chief executive officer of Kinray. "The combination of Kinray's distribution model with the benefits of the value-added services offered by Cardinal Health will benefit our customers, making them even more efficient and successful in caring for their patients. It also provides our people with the opportunity to join one of the world's premier health care companies – one that understands the value we bring to the retail independent pharmacies we serve."
After the transaction is complete, Kinray customers will be able to tap into a leading line of service offerings from Cardinal Health including its SOURCE(SM) Generics program and additional tools that help improve the back office efficiency of retail pharmacies, including inventory management tools, reimbursement services, managed care contracting services, Specialized Care Centers and local store marketing programs.
Cardinal Health