Cardinal Health Stock Gains Following Two Strategic Acquisitions

Core Viewpoint - Cardinal Health (CAH) has announced definitive agreements to acquire GI Alliance (GIA) and Advanced Diabetes Supply Group (ADSG), which are expected to enhance its strategic growth and patient care initiatives [1][2]. Group 1: Acquisition Details - CAH is set to acquire a majority stake in GIA for approximately $2.8 billion in cash, representing 71% ownership, and ADSG for about $1.1 billion in cash [7]. - GIA is the leading gastroenterology management services organization in the U.S., with over 900 physicians across 345 practice locations in 20 states, providing a comprehensive continuum of gastroenterology care [4][5]. - ADSG serves around 500,000 diabetic patients annually, offering customized diabetes solutions to support patients at home [6]. Group 2: Financial Impact - Following the acquisition announcement, CAH's shares increased nearly 1.5% to $123.51, with a year-to-date gain of 22.5%, outperforming the industry growth of 5.8% [3]. - CAH currently has a market capitalization of $29.44 billion and an earnings yield of 6.36%, which is higher than the industry average of 5.28% [4]. - The acquisitions are expected to grow CAH's revenues, segment profit, and adjusted earnings per share within the first 12 months post-closure, with guidance to be reflected in fiscal year 2025 [8]. Group 3: Strategic Focus - The acquisition of GIA is anticipated to strengthen CAH's multi-specialty business and enhance its Pharmaceutical and Specialty Solutions segment [4]. - The integration of ADSG aligns with CAH's at-Home Solutions strategy, supporting the growing diabetic patient population [6]. - CAH's recent acquisitions, including Integrated Oncology Network and Specialty Networks, underscore its strategic focus on expanding its presence in specialty care and enhancing technology and capabilities [9][11].