Cardinal to buy Viasys for $1.4B

Cardinal to buy Viasys for $1.4B

	Published : Mon, 14 May 2007 18:04 By : Agencies Print this Story

DUBLIN, Ohio (AP) - Medical products and services company Cardinal Health Inc. said on Monday it will buy medical technology company Viasys Healthcare Inc. for $1.42 billion, an acquisition that will help Cardinal expand in international markets.

Cardinal will pay $42.75 per share for Viasys' outstanding shares, a 35 percent premium over its closing stock price of $31.55 on Friday. Viasys stock jumped 37 percent, or $11.52, to a record $43.07 per share in early trading on Monday. Cardinal also will assume debt of $50 million.

Conshohocken, Pa.-based Viasys, which had revenue of $610 million in 2006, has about 40 percent of its customers in international markets. The company makes ventilators and diagnostic systems used to diagnose and treat pulmonary disease and instruments that monitor the brain, muscles, blood flow, hearing and nerves. It also makes orthopedic implants.

Cardinal is an $80 billion company that makes products and provides services for hospitals, doctors and pharmacies. It said the addition of Viasys complements its products, which include those that address medication errors, adverse drug reactions and infection prevention. Cardinal also makes surgical drapes, gowns and other products to improve critical care and reduce hosptial-acquired infections.

'Viasys is a perfect strategic fit with our mission to help providers make health care safer and offers immediate revenue and earnings opportunities in key geographies worldwide,' said R. Kerry Clark, Cardinal Health chief executive, in a statement.

Cardinal reiterated an estimate of $3.32 to $3.40 for earnings per share from continuing operations for the year, with adjusted earnings per share of $3.95 to $4.15, including an expected 10 cents per share charge for the Viasys acquisition, in its next fiscal year.

Cardinal, based in this Columbus suburb, expects the purchase to add to earnings in fiscal 2009 and even more so in fiscal 2010.

Analysts surveyed by Thomson Financial expect earnings per share of $3.40 for fiscal 2008, $4.11 for fiscal 2009, and $4.76 for fiscal 2010.

Moody's Investors Service affirmed Cardinal's credit ratings on the announcement. The rating service gives a 'Baa2' for the company's senior unsecured notes, and a 'Prime-2' for its short-term debt. Moody's said the acquisition of Viasys and Cardinal's recent $3.3 billion sale of its pharmaceutical technologies and services unit are consistent with the company's business optimization plan.

Cardinal shares rose 31 cents to $69.38 in trading Monday morning. Its shares have traded from $61.15 to $76.15.