Cardinal Health (CAH) Buys Bendcare CPO-GPO, Invests in Its MSO
Cardinal Health, Inc. CAH recently acquired the Bendcare group purchasing organization (CPO-GPO) entity and made a minority investment in the Bendcare management services organization (“MSO”). Following the buyout, current Bendcare-affiliated CPO-GPO members will shift to Cardinal Health's Cornerstone Rheumatology GPO. Further, Cardinal Health will become the exclusive distributor for those practices.
Financial terms of the transaction have been kept under wraps.
The latest acquisition is expected to significantly strengthen Cardinal Health's specialty solutions business, which is a component of its broader Pharmaceutical segment, on a global scale.
Rationale Behind the Buyout
Following the acquisition, the proficiencies and capabilities of Cardinal Health and Bendcare are expected to be combined. This, in turn, will likely create an integrated suite of clinical, practice management and distribution solutions to help support rheumatology practices across United States.
The buyout also expands Cardinal Health's distribution opportunities and technology solution offerings for specialty practices.
Per Cardinal Health's management, the acquisition will likely enable the company to focus on achieving cost-effective patient outcomes and care.
Industry Prospects
Per a report by Research and Markets, the global pharmaceuticals market is expected to grow from $1228.45 billion in 2020 to $1700.97 billion in 2025 at a CAGR of 8%. Factors like rise in the elderly population and increased patient pool of many chronic diseases like rheumatoid arthritis are expected to drive the market.
Given the growing market potential, the new buyout seems to have been timed well.
Recent Developments
Last month, Cardinal Health tied up with Zipline and begun long-range drone deliveries in North Carolina. The latest partnership between the two companies is aimed at transforming patients’ experience while improving care delivery.
The same month, Cardinal Health announced the addition of a new distribution center in the Columbus, OH area as part of a multi-year warehouse modernization and growth plan. The new distribution center will support the company's at-Home Solutions business.
In April, Cardinal Health collaborated with Innara Health on the redesign of the NTrainer System. The next-generation NTrainer will likely to be smaller, more intuitive and easier to integrate into NICU feeding protocols.
Price Performance
Shares of the company have lost 7% in the past year compared with the industry’s 10.6% fall and the S&P 500’s 11.3% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Currently, Cardinal Health carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. AMN, Patterson Companies, Inc. PDCO and ShockWave Medical, Inc. SWAV.
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 14.5% against the industry’s 12.4% fall in the past year.
Patterson Companies, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 9.6%. PDCO’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%.
Patterson Companies has lost 2.3% compared with the industry’s 10.6% fall over the past year.
ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 44.9% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 189.9%.
ShockWave Medical has gained 3.4% against the industry’s 24.9% fall over the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
Patterson Companies, Inc. (PDCO) : Free Stock Analysis Report
AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report
ShockWave Medical, Inc. (SWAV) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
