News | Cardiovascular Business | March 12, 2021

Cardinal Health Sells its Cordis Cardiology Business to Hellman & Friedman

Investment company hopes to create technology accelerator to speed bringing new innovations to market

Cardinal Health Sells its Cordis Cardiology Business to Hellman & Friedman. Hopes to build the Cordis Accelerator for innovative cardiovascular device development.

March 12, 2021 — Cardinal Health today announced that it is selling its Cordis cardiology and endovascular business to Hellman & Friedman (H&F) for approximately $1 billion. 

Hellman & Friedman is a global private equity firm with investments in high-quality growth businesses. It is partnering in the transaction with Ajax Health and Zeus Health to build the Cordis business. Ajax identifies and supports scaling up disruptive technologies in the healthcare space. Zeus Health is a platform focused on investing in and operating a portfolio of emerging medical technology companies.

"Cordis is an excellent fit with our philosophy of investing in great businesses as a market-leading cardiovascular device manufacturer known for high-quality products, strong physician satisfaction and superb patient outcomes," said Hunter Philbrick, Partner at H&F. "We are excited to invest in the talented Cordis, Ajax and Zeus teams to drive industry leadership, therapeutic innovation and improved patient experiences."

"We at Ajax Health and Zeus Health are ecstatic about injecting growth into Cordis' powerful platform, and will do so through investments in the core business and through an independent R&D engine – the 'Cordis Accelerator' – to develop and commercialize a new pipeline of products exclusively for Cordis," said Duke Rohlen, CEO of Ajax Health and Zeus Healt, and Executive Chairman-designate of Cordis and CEO of Cordis Accelerator. "We see an unparalleled opportunity to partner with both existing Cordis leadership and H&F to combine a best-in-class innovation engine with a strong and robust commercial chassis. Together, we will establish Cordis as the standard bearer for medical device innovation."

Cardinal said it has signed a definitive agreement that includes buyer's assumption of certain liabilities and seller's retention of certain working capital accounts. The transaction is expected to close in the first half of Cardinal Health's fiscal year 2022, subject to customary closing conditions and regulatory clearances.

After closing, most assets and liabilities associated with the Cordis business will transfer to H&F. Cardinal Health will retain full authority for lawsuits related to inferior vena cava filters in the United States and Canada, as well as liability associated with these matters. Cardinal Health estimates that, after completion of the transition services agreement, the divestiture of the Cordis business will decrease Medical segment profit by approximately $60 million to $70 million on an annual run-rate basis.

In connection with the entry into this definitive agreement, Cardinal Health will classify the Cordis business as held for sale, which Cardinal Health expects to result in a pre-tax loss of up to $120 million in the third quarter of its fiscal year 2021. Additionally, Cardinal Health was authorized to incur costs associated with the planned divestiture of up to $125 million, primarily in its fiscal years 2021 and 2022.

"Our decision to divest Cordis demonstrates our disciplined approach to evaluating our portfolio and focusing our resources in our strategic growth areas where we are an advantaged owner," said Mike Kaufmann, CEO of Cardinal Health. "Looking forward, we remain committed to our medical distribution and global medical products businesses."

Cordis was once one of the largest vendors in interventional cardiology, having developed and commercialized the first drug-eluting sent. 

For more information: www.hf.com, www.ajaxhealth.com

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