Cardinal Health is selling its Pharmaceutical Technologies and Services (PTS) segment to The Blackstone Group for approximately $3.3 billion in cash. The PTS businesses generates approximately $1.8 billion in annual revenue developing, manufacturing, and packaging for pharmaceutical and biotech firms.
"We are attracted to the strong industry fundamentals and leadership market positions of PTS in contract manufacturing, drug development, and packaging and printing services,” states Chinh Chu, senior managing director of The Blackstone Group. “We will work in concert with PTS' proven and experienced management team to build upon and strengthen their platform of competitive offerings, in order both to accelerate and enhance the growth and profitability of the PTS businesses." The PTS division has approximately 10,000 employees at more than 30 facilities worldwide.
Cardinal Health expects the sale to generate approximately $3.1 billion in after-tax proceeds, which it will use to repurchase its shares, according to the company’s announcement on Nov. 30, 2006. "We made very rapid progress in less than two months to reach an agreement with such a quality organization as The Blackstone Group," says R. Kerry Clark, president and CEO of Cardinal Health. "The move allows us to accelerate the repurchase of Cardinal Health shares and focus our full attention on our mission to help make healthcare safer and more productive through our supply-chain and clinical products businesses."
The sale is expected to close early in fiscal fourth quarter.