Healthcare product distributor and data analytics services company Cardinal Health has announced a $1.2 billion cash deal to acquire Specialty Networks, which the former said will help it expand across specialty therapeutic areas and enhance other provider offerings.
Specialty Networks is an integrated platform focused on independent physician practices across urology, gastroenterology and rheumatology as well as life sciences organizations. It lists 11,500 specialty providers across 1,200 independent practices among its customer base as well as a range of offerings supporting group purchasing contracts, population health management, patient engagement, workflow automation and clinical research.
"Expanding in specialty is a top priority for us and we have been investing to expand our offering," Jason Hollar, CEO of Cardinal Health, said in a release. "The acquisition of Specialty Networks enhances our specialty strategy by providing new capabilities that strengthen the link between our downstream and upstream services, enabling us to create value for customers, manufacturer partners and patients."
Specifically, the deal announcement called out Specialty Networks’ subsidiary PPS Analytics platform, which combines the real-world data extracted from electronic health records and other practice management systems with AI to deliver actionable insights. The platform is “a strong complement” to Cardinal Health’s other capabilities and will expand its Pharmaceutical and Specialty Solutions segment’s suite of offerings for nationwide specialty practices.
"Combining [Specialty Networks’] unique service offerings and advanced technology solutions like PPS Analytics with our distribution partnerships and operations will enhance our value proposition for our specialty [group purchasing organization] members across therapeutic areas,” Debbie Weitzman, CEO of Cardinal Health pharmaceutical and specialty solutions, said in a release. “Together, we will positively affect the lives of countless patients."
Cardinal Health said it's also interested in applying Specialty Networks’ “deep understanding of independent specialty physician practices” to the ongoing development of its Navista Network, a suite of tech solutions that targets independent community oncologists.
More broadly, Cardinal Health noted the acquisition will accelerate its upstream business with biopharma manufacturers.
The companies said they have entered a definitive agreement, though the deal is still subject to customary closing conditions including regulatory approval. It is expected to be accretive to Cardinal Health’s earnings 12 months following the transaction’s close.
Shailendra Sharma, CEO of Specialty Networks, will stay on board after the close to continue leading his team within Cardinal Health. He said in the statement that the two companies “are united in their mission” and that the combination “is a strong cultural fit and a big win for physicians and patients.”
Cardinal Health’s distribution, manufacturing and data services business operates across more than 30 countries and employs about 48,000 people. It reported $205 billion in revenues for its 2023 fiscal year.