“Cardinal Health buying Kinray for $1.3B in cash - Huffingtonpost.com” |
| Cardinal Health buying Kinray for $1.3B in cash - Huffingtonpost.com Posted: 18 Nov 2010 05:17 AM PST NEW YORK — Health care products maker Cardinal Health Inc. said Thursday it will buy New York-based drug distributor Kinray Inc. for $1.3 billion in cash, expanding its base of independent pharmacies by 40 percent. Cardinal Health said Kinray is the world's biggest privately held distributor of drugs, health, beauty, and home care products. Kinray, which does business with about 2,000 independent pharmacies, will expand Cardinal's business in the Northeast. Cardinal Health now serves about 5,000 independent pharmacies. Cardinal Health expects the purchase to increase fiscal 2011 profit by a small amount and add at least 12 cents per share to its profit in fiscal 2012. Shares of Cardinal Health climbed $2.06, or 6 percent, to $36.53 in afternoon trading. Earlier they rose to an annual high of $36.79. Independent pharmacies are the key to the deal, said Jefferies & Co. analyst Richard Close. In a note to clients, Close said non-chain pharmacies are far more profitable for Cardinal Health because unlike chain stores, they do not buy drugs in bulk. He said independent pharmacies should boost Cardinal Health's profit in the coming years, as the company sells more low-cost generic drugs to its chain customers. Cardinal Health had $98.5 billion in revenue in its latest fiscal year, compared with $3.5 billion in revenue for Kinray. Close kept a "Hold" rating on shares of Dublin, Ohio-based Cardinal Health. He noted that the deal will likely limit share repurchases and large acquisitions by the company for about six to nine months. The deal is expected to close in late 2010 or early 2011. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php This posting includes an audio/video/photo media file: Download Now |
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