Tuesday 19 June 2012

Regional Wholesaler Dik Drug-Letter Of Intent-Cardinal Health

BREAKING NEWS: Cardinal Health to Acquire DIK Drug

In today's sorta surprising (but not really) M&A news, Cardinal Health (NYSE: CAH) has signed a letter of intent to acquire regional wholesaler Dik Drug. No press release yet, so consider this post to be another Drug Channels exclusive. (The news was confirmed to me by Cardinal's SVP of Public Relations.)This deal is one more step in the long-running consolidation of the U.S. pharmaceutical distribution business. It also helps further boost Cardinal's business with smaller pharmacies. Dik is a closely-held and fairly secretive private company, so there's no official data on revenues, but most likely less than $2 billion. [UPDATE: I have learned that revenues are actually below $500 million.]Industries do not consolidate forever (even drug wholesaling). Given the limited number of possible buyers and the pharmacy industry's pace of change, I expect that the remaining regional wholesalers will be looking for a reasonable exit strategy over the next few years, too. Read on for some additional background.Read more »Copyright © 2006-2012 Pembroke Consulting, Inc. and Copyright © 2006-2012 Drug Channels. This Feed is for personal non-commercial use only. read more..

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