Cardinal Health to spend $1.2 billion to boost ability to analyze medical data

By Tomi Kilgore

Buying Specialty Networks gives Cardinal Health access to PPS Analytics, which uses AI to analyze data from electronic medical records

Cardinal Health Inc. announced Wednesday an agreement to buy Specialty Networks for $1.2 billion in cash, as the drug distributor and medical products maker looks to enhance its data analytics capabilities.

The company said the acquisition expands its offering in therapeutic areas and increases its data and research opportunities with biopharmaceutical manufacturers.

Cardinal Health's stock (CAH) rose 0.9% in premarket trading, to put it on track to open just below the record closing price of $108.05 on Dec. 13.

"Combining [Specialty Networks'] unique service offerings and advanced technology solutions like PPS Analytics with our distribution partnerships and operations will enhance our value proposition for our specialty GPO [group purchasing organization] members across therapeutic areas," said Debbie Weitzman, chief executive of Cardinal Health Pharmaceutical and Specialty Solutions.

Specialty Networks' PPS Analytics analyzes data, from sources including electronic medical records, imaging and dispensing systems, and uses artificial intelligence to provide insights for providers, researchers, payers and policymakers.

The deal is expected to start adding to Cardinal Health's adjusted earnings per share a year after the closing.

Cardinal's stock has rallied 17.7% over the past three months through Tuesday, while the Health Care Select Sector SPDR ETF (XLV) has climbed 12.9% and the S&P 500 has advanced 17.4%.

-Tomi Kilgore

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01-31-24 0903ET

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