Cardinal Health closes in on $6B deal for Medtronic’s medical supplies biz

Cardinal Health (NYSE:CAH) close to acquiring the medical supplies business deal to pay $6 billion for the medical supplies business Medtronic (NYSE:MDT) acquired when it paid $50 billion for Covidien in January 2015.

Citing “people familiar with the matter,” Reuters reported that exclusive talks between the companies could result in an announcement later this month. Medtronic and Cardinal Health declined to comment to the wire service. The division makes general medical equipment including monitoring equipment, medical instrumentation, needles and other basic supplies.

Rumors that the Fridley, Minn.-based company wanted to divest the supplies business, gained as part of the Covidien deal, 1st emerged in early February. In March several companies were said to be interested, Dublin, Ohio.-based Cardinal Health among them. The medical supplies business threw off earnings before interest, taxes, depreciation and amortization of approximately $500 million last year.

For Cardinal Health, which in October 2015 paid $2 billion for Cordis, the Johnson & Johnson (NYSE:JNJ) stent-making arm of, the $5 billion Medtronic supplies business would significantly boost its medical device footprint.

“Certainly a part of the equation for us is how we use our balance sheet, and that may be through activities that are available external to us and the other ways that we deploy capital,” CEO George Barrett said last month during a conference call with analysts.

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