Deals roundup: Cardinal Health in plan to spin off med-tech business.(Company overview)

Deals roundup: Cardinal Health in plan to spin off med-tech business

By AMANDA PEDERSEN

Medical Device Daily Staff Writer

Some big changes are ahead for Cardinal Health (Dublin, Ohio) u including the spinning-off of its med-tech businesses u and the retirement of CEO Kerry Clark.

Cardinal Health has proposed a tax-free spin-off of its clinical and medical products (CMP) business as a separate public company that would be led by current vice chairman David Schlotterbeck. The spin-off is expected by mid-2009, the company said.

Clark said he would continue to lead the company through the spin-off and then will retire. George Barrett, who has served as CEO/vice chairman of Healthcare Supply Chain Services since joining Cardinal Health in January, will succeed him.

"We are choosing to do this for several reasons: First, our Healthcare Supply Chain Services business and our Clinical and Medical Products businesses are very different, especially when you consider the products, the customer channels, and the geographic footprints of each business. As a result, we believe this move will sharpen our strategic focus, especially since each business requires different strategies and skill sets as well as unique R&D, IT, and capital investments," Clark told investors yesterday during a company conference call. "Second, Clinical and Medical Products has matured and can stand on its own as a publically traded company. Through organic growth and strategic acquisitions this business has become a sizeable global enterprise with a strong management team. And third, we believe this approach will deliver the maximum value to our customers and shareholders over time through a more focused management that is closer to its customers."