Cardinal Health adds home-care assets in $360mn acquisition push

Cardinal Health said Monday it agreed to acquire two home-care businesses for a combined $360 million in cash, adding scale in diabetes supplies and other direct-to-patient medical products. The transactions are small relative to the healthcare services group’s broader operations, but they extend a capital deployment strategy aimed at businesses with faster growth and higher margins than traditional distribution.

The larger purchase is AdaptHealth’s diabetes business, which provides continuous glucose monitors, insulin pumps and related supplies to more than 225,000 patients a year through a direct-to-patient model, according to CNBC. Cardinal Health also agreed to buy Strive Medical, which serves more than 20,000 patients annually with urology, wound-care, ostomy and incontinence products.

Home-care supply businesses operate differently from wholesale distribution. Rather than moving products in bulk through hospitals, pharmacies or other institutional channels, these companies manage recurring shipments and patient relationships for chronic or ongoing medical needs. That model can create steadier demand and may carry different economics from lower-margin distribution activity.

Deals follow larger acquisitions

The agreements build on two bigger transactions Cardinal Health announced in late 2024. The company agreed to buy a majority stake in GI Alliance, a physician practice management organization, for about $2.8 billion. It also bought Advanced Diabetes Supply Group for $1.1 billion, CNBC reported.

GI Alliance fits Cardinal Health’s effort to expand into the administrative and business side of medical practices. Advanced Diabetes Supply Group, like the AdaptHealth diabetes assets, supports the company’s push into at-home medical supplies.

Jeff Marks, portfolio director at CNBC’s Investing Club, said Cardinal Health had developed a strong record of acquisitions and that the latest deals continued that approach. Leerink analysts wrote Monday that the diabetes expansion was “logical and value accretive” for a platform that had recently grown significantly, according to CNBC. The analysts described both purchases as strategic tuck-in deals that support Cardinal Health’s longer-term growth profile.

Margin gap explains the focus

Cardinal Health’s segment profitability shows why management has been adding businesses outside its legacy distribution base. In its fiscal third quarter, the company’s “other” segment, which includes at-home solutions, nuclear and precision health solutions, and OptiFreight Logistics, generated an operating margin of about 10.5%, CNBC reported.

That compared with roughly 1.4% in pharmaceutical and specialty solutions and less than 1% in global medical products and distribution. The figures underline the economic trade-off for large healthcare distributors: legacy scale can produce high revenue, while adjacent services may offer stronger operating margins if integrated effectively.

CNBC said the latest acquisitions reinforced the investment case it had outlined when adding Cardinal Health to its portfolio in March, citing the company’s recession-resistant business, demographic demand drivers and consistent double-digit earnings growth. CNBC also disclosed that Jim Cramer’s Charitable Trust held a long position in Cardinal Health.

This story draws on original reporting from CNBC.