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Cardinal To Spin off Medical Technology BusinessCardinal To Spin off Medical Technology Business
Cardinal Health's grand experiment is over. The conglomerate, one of the largest distributors of drugs and other products to hospitals, attempted in recent years to become a medical device company also. But now it has decided to spin off its high-margin, high-tech medical device businesses, reports Reuters. It is doing so in order to focus on turning around its core drug distribution business, which has been underperforming.
September 30, 2008
1 Min Read
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The spinoff is expected to be completed by the middle of next year.The new company's product lines will include Alaris drug infusion pumps, ATEA and LTV respiratory ventilators, and Pyxis automated drug dispensing systems for hospital pharmacies. These high-margin, attractive products could help the new company get a more favorable stock valuation on its own than as part of Cardinal. Cardinal will retain lower-margin and commodity medical products such as surgical gloves and fluid management systems.David Schlotterbeck, who heads the division of Cardinal that includes the businesses being spun off, will be the CEO of the new company, which will be based in San Diego.
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