What's Happening?
Cardinal Health has announced the acquisition of Solaris Health, a multispecialty management services organization (MSO) focused on urology, for approximately $1.9 billion. This acquisition is part of Cardinal Health's strategy to expand its multispecialty MSO platform, The Specialty Alliance. The deal involves cash and new debt financing, and upon completion, Cardinal Health will own about 75% of The Specialty Alliance. The acquisition is expected to be slightly accretive to Cardinal Health's non-GAAP earnings per share in the first year following the close. Solaris Health's model supports a wide range of ancillary services, enhancing Cardinal Health's reach in the urology sector. The acquisition will add over 750 providers across more than 250 practice locations in 14 states, furthering Cardinal Health's multispecialty growth strategy.
Why It's Important?
The acquisition of Solaris Health is significant for Cardinal Health as it strengthens its position in the urology specialty, a sector identified as attractive for growth. By expanding its MSO platform, Cardinal Health aims to meet the comprehensive needs of community urologists, leveraging the combined capabilities of The Specialty Alliance and Specialty Networks. This move aligns with Cardinal Health's long-term growth strategy to increase its footprint in specialty medicine, particularly in high-priority areas such as autoimmune, urology, and oncology. The acquisition also provides diverse revenue streams due to the breadth of ancillary services offered by Solaris Health, which include pathology, laboratory testing, and diagnostic imaging.
What's Next?
Following the acquisition, Cardinal Health plans to integrate Solaris Health's providers and management into The Specialty Alliance, alongside GI Alliance physician owners. The company anticipates further expansion of its MSO platforms, reaching approximately 3,000 providers across 32 states. Cardinal Health's CEO, Jason Hollar, emphasized the company's focus on accelerating specialty growth and leveraging opportunities for future expansion. The acquisition is expected to close by the end of the year, with Cardinal Health continuing to explore additional opportunities to drive significant value and growth in specialty medicine.
