Johnson & Johnson continues to slim down its medical device business, selling off its division that helped first bring drug-eluting stents (DES) to the market.
Johnson & Johnson had spent decades building up its medical device business, eventually making it the biggest medical device company in the world in terms of revenue. The company has gradually shrinking its medtech division to focus on more profitable sectors like pharmaceuticals. It has now has announced that it has finished selling its Cordis cardiovascular division to Cardinal Health, Inc. for $1.944 billion. Cardinal Health had first announced its plans to acquire Cordis in March.
For Cardinal Health, the acquisition could significantly boost its ability to compete in the cardiovascular device segment.
In 2014, Cordis had annual revenue of roughly $780 million, divided between cardiology and endovascular products. Meanwhile, Cardinal Health had revenue of approximately $11.0 billion in the same year.
Based in Fremont, CA, Cordis has a strong presence internationally, selling its products in more than 50 countries. In all, 70% of its revenue comes from outside of the United States.
The acquisition is the second for Cardinal Health to surpass the billion-dollar mark. This summer, the company bought The Harvard Drug Group ("THDG") for almost $1.12 billion in cash.
The CEO of Cardinal Health's medical segment, Don Casey, a long-term J&J veteran, explained in a recent Clinica article that the company is planning to look for more strategic acquisitions.
The company also plans on wooing its hospital customers by developing innovative methods to streamline the distribution and supply of products, thus helping them save money.
On October 5, Cardinal Health's stock was up by more than 1%, hitting $79.55. In April, it hit an all-time for the company of $91.50.