Summary
Cardinal Health, Inc. (CAH) has announced a significant strategic move with the entry into an Agreement and Plan of Merger to acquire approximately 71% of The GI Alliance Holdings, LLC (GIA) for approximately $2.8 billion. This acquisition, expected to close subject to regulatory approval and customary conditions, marks a substantial investment aimed at expanding Cardinal Health's presence in the gastroenterology market. The company has secured committed financing for the transaction through a $2.9 billion senior unsecured bridge term loan facility from Bank of America, N.A. This provides flexibility for the acquisition and related expenses. Additionally, Cardinal Health has included a call option in the merger agreement to acquire the remaining outstanding equity of GIA in the future, signaling a long-term commitment to this strategic venture.
Key Highlights
- 1Cardinal Health to acquire approximately 71% of The GI Alliance Holdings, LLC (GIA) for approximately $2.8 billion.
- 2The acquisition is subject to customary closing conditions, including expiration of the Hart-Scott-Rodino waiting period.
- 3A $2.9 billion, 364-day senior unsecured bridge term loan facility has been committed by Bank of America, N.A. to finance the acquisition.
- 4Cardinal Health has secured the option to purchase the remaining GIA equity on future anniversaries of the closing date at fair market value.
- 5The Merger Agreement includes standard representations, warranties, covenants, and termination provisions, with a $20 million termination fee payable under certain circumstances.
- 6Neither the closing of the Bridge Facility nor other financing is a condition to closing the GIA acquisition.
- 7The company plans to discuss the acquisition on a conference call scheduled for November 12, 2024.