Today, Cardinal Health Inc. (NYSE:CAH) announced the successful public offering of $2.9 billion in senior notes, as detailed in a recent 8-K filing with the Securities and Exchange Commission. The company, a major distributor of pharmaceuticals and medical products, issued notes with varying maturities and interest rates: $500 million at 4.700% due in 2026, $750 million at 5.000% due in 2029, $1 billion at 5.350% due in 2034, and $650 million at 5.750% due in 2054.
Cardinal Health stated that the proceeds from the note offerings will partially fund its planned acquisitions of the majority equity interests in The GI Alliance Holdings, LLC, and Advanced Diabetes Supply Group, including related fees and expenses. The company plans to use any remaining funds for general corporate purposes until they can be applied to the acquisitions.
The notes are governed by an indenture agreement with The Bank of New York Mellon (NYSE:BK) Trust Company, N.A., acting as trustee. If the acquisition of The GI Alliance Holdings is not completed by November 11, 2025, or within five business days after any agreed-upon extension, Cardinal Health is required to redeem the notes at 101% of their aggregate principal amount, plus accrued interest.
Furthermore, the company has reduced its commitment under a previous agreement with Bank of America (NYSE:BAC), N.A., following the note offering. The original agreement was for a 364-day senior unsecured bridge term loan facility to support the acquisitions. However, with the successful notes offering, Cardinal Health has terminated the excess commitments.
The 8-K filing includes opinions from Patrick Pope, Executive Vice President, General Counsel, and Secretary of the company, and legal counsel Skadden, Arps, Slate, Meagher & Flom LLP, regarding the legality of the notes.
This financial move comes as Cardinal Health continues to expand its healthcare services and product offerings. The information reported in this article is based on statements from a press release.
In other recent news, Cardinal Health Inc. has announced significant developments. The company issued $2.9 billion in aggregate principal amount of notes, facilitated by BofA Securities, Inc., J.P. Morgan Securities LLC, and Wells Fargo (NYSE:WFC) Securities, LLC. The funds raised through this venture are typically used for general corporate purposes, such as refinancing existing debt or supporting ongoing operations.
Cardinal Health also reported an increase in earnings per share (EPS) and adjusted free cash flow expectations for fiscal year 2025, despite a 4% decrease in total revenue. This is attributed to the company's operational performance, particularly in the Pharmaceutical (TADAWUL:2070) and Specialty Solutions segment.
In addition, all 10 board nominees were elected and the executive compensation approved in the recent annual meeting. Ernst & Young LLP was ratified as the company's independent auditor for the fiscal year ending June 30, 2025.
Furthermore, the company announced plans to acquire Integrated Oncology Network (LON:NETW) for $1.1 billion. Despite challenges in the GMPD segment, Cardinal Health remains optimistic about its long-term profit goals and growth strategies.
InvestingPro Insights
Cardinal Health's recent $2.9 billion senior notes offering aligns with its strategic growth initiatives, as reflected in several InvestingPro metrics and tips. The company's market cap stands at $29.54 billion, underscoring its significant presence in the healthcare sector. An InvestingPro Tip highlights that Cardinal Health is a prominent player in the Healthcare Providers & Services industry, which is consistent with its expansion plans through acquisitions.
The company's financial health appears robust, with revenue reaching $224.45 billion in the last twelve months. This substantial revenue base supports Cardinal Health's ability to take on additional debt for acquisitions. Another InvestingPro Tip notes that the company's cash flows can sufficiently cover interest payments, which is crucial given the new debt issuance.
Cardinal Health's dividend history is particularly noteworthy. An InvestingPro Tip reveals that the company has raised its dividend for 36 consecutive years, demonstrating a strong commitment to shareholder returns. This track record may provide investors with confidence in the company's financial stability and long-term growth prospects.
For readers interested in a more comprehensive analysis, InvestingPro offers 13 additional tips that could provide deeper insights into Cardinal Health's financial position and future outlook.
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