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Henry Schein acquires $300M physician office business from Cardinal Health

Strategic agreement aims to broaden product selection and increase efficiency for small-practice customers.

Henry Schein Headquarters, photo from Henry Schein.

Two giants in the medical products business have agreed to consolidate services that bring supplies to physician offices.
 
Cardinal Health's physician office sales team and distribution business, with annual revenue of more than $300 million, will be transitioned into Henry Schein's Medical Group, which will service accounts at more than 25,000 physician office locations.
 
The firms jointly made the announcement on Friday, describing the deal as a "long-term strategic agreement." Henry Schein has committed to purchase Cardinal Health brand products and use the Dublin, Ohio-based company as a primary source for various medical products.
 
Stanley Bergman, CEO of Melville, New York-based Henry Schein, said the transaction would leverage Cardinal Health's experience in serving healthcare systems across multiple sites, and the end result would offer a wider breadth of products to ideally help physicians operate efficiently.
 
Cardinal Health's Medical group reported revenue of $2.9 billion (up 5 percent) for the first quarter of fiscal year 2015; profits rose 6 percent to $113 million. During an earnings call on Oct. 30, CEO George Barrett foreshadowed the Henry Schein agreement by saying Cardinal Health would increase its presence in ambulatory and post-acute settings as a "strategic priority."
 
"We continue to more cost-effectively provide products and services to small physician practices,” Barrett added.