Cardinal Sells CareFusion Shares - Analyst Blog

Cardinal Health (CAH), a leading distributor of pharmaceuticals and medical supplies, recently sold off the remaining 30.5 million shares of CareFusion Corporation (CFN) for $705.9 million. CareFusion, a San Diego-based vendor for medical equipment and infection control supplies, was spun off from Cardinal Health in 2009.

 

As per the spin-off arrangement, Cardinal Health distributed 0.5 shares of CareFusion common stock for each share of its stock that was outstanding. It retained about 19% of the shares in CareFusion at the time of the distribution. Under the terms of the agreement Cardinal Health was required to dispose of its equity holdings in CareFusion within five years of the distribution (by August 31, 2014). The agreement authorized Cardinal to dispose of its shares through open-market sales, private sales or a combination of these actions.

 

The spin-off of CareFusion from Cardinal Health was completed in August 2009. CareFusion began trading under the ticker symbol “CFN” on the New York Stock Exchange on September 1, 2009.   

 

Of its total holdings in CareFusion, Cardinal Health earlier sold off 10.9 million shares for $270.7 million in the fiscal year ending June 30, 2010. With its latest sale of the remaining 30.5 million shares, the company dispensed of its entire holdings (of 19%) for a total consideration of $976.6 million.

 

Following the divestiture in 2009, Cardinal Health began operating as a standalone entity with two reporting segments – Pharmaceutical and Medical. Pharmaceutical includes pharmaceutical distribution, manufacturer and specialty services and nuclear and pharmacy services. Medical includes medical product distribution, lab product distribution, and infection prevention products. The company's major competitors are AmerisourceBergen Corporation (ABC) and McKesson Corporation (MCK) among others.