Cardinal Health to Acquire AdaptHealth Diabetes Unit, Strive Medical for $360 Million

Cardinal Health (NYSE: CAH) on Monday announced agreements to acquire two medical supply businesses for a total of approximately $360 million, significantly expanding its presence in the direct-to-consumer home care market.

Deal Breakdown

The acquisitions consist of two separate transactions:

• AdaptHealth's (NASDAQ: AHCO) Diabetes Health business will be acquired for $235 million in cash, according to a separate statement from AdaptHealth. This unit provides continuous glucose monitors, insulin pumps, and related support services directly to patients.
• Strive Medical, a provider specializing in urology, wound care, and ostomy supplies, will also be acquired. Strive Medical serves more than 20,000 people annually.

Cardinal Health stated the deals are designed to broaden its at-Home Solutions business, building upon its previous purchase of Advanced Diabetes Supply. The company expects the transactions to be accretive to its adjusted earnings per share within the first 12 months after closing.

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Strategic Rationale and Market View

The move deepens Cardinal Health's reach into the growing market for home-based healthcare. The AdaptHealth deal provides a direct-to-patient platform for diabetes supplies, while the Strive Medical purchase enhances the company's urology offerings.

Michael Cherny, an analyst at Leerink Partners, described the acquisitions as "logical, strategic tuck-ins" for Cardinal Health in a note to clients. Cherny noted that the acquired diabetes business would likely require operational improvements to restore growth and profitability, but suggested that Cardinal Health's scale should enable it to execute a successful turnaround.