Henry Schein buys Cardinal Health’s $300 million physician-office business

Health care distributor Henry Schein Inc., Long Island’s largest company by revenue, has acquired Cardinal Health Inc.’s physician-office business with annual sales of more than $300 million, the companies announced Friday.

Financial terms of the deal were not disclosed, but Robert W. Baird Co. Inc. analyst Jeff Johnson said in a research note that distributors typically are sold for a price roughly equal to their trailing 12 months’ revenue. Johnson added, though, that Henry Schein’s multiyear agreement to buy and distribute Cardinal Health-branded medical products likely would reduce the up-front price.

Henry Schein and Cardinal Health both said the deal, which already has closed, would “slightly” increase the earnings per share of both companies in fiscal 2015.

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“Henry Schein is committed to being a reliable network of trusted advisers for all office-based practitioners, whether in our traditional customer base of individual practices or those affiliated with an integrated delivery network,” said Stanley M. Bergman, chairman and chief executive of the Melville-based company. “Our agreement with Cardinal Health furthers this commitment by offering customers access to Cardinal Health’s leading branded products and leveraging Cardinal Health’s experience in serving health care systems.”

The acquisition will add about 200 employees to Henry Schein’s global head count of about 17,000, including 1,000 on Long Island. Earlier this month, Henry Schein announced plans to trim 2 percent to 3 percent of its workforce, but it said that specific cuts would be announced in the second half of 2015.

Ross J. Muken, an analyst for Evercore ISI, said in a research note that the deal would increase the revenue of Henry Schein’s medical business by about 17 percent, the largest addition to that unit in the company’s history.

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Henry Schein, with revenue of $9.6 billion in 2013, sells products to the offices of dental, medical and veterinary practitioners in 28 countries.

Cardinal Health, based in Dublin, Ohio, manufactures and distributes medical, surgical and diagnostic products. The company, with $91 billion in revenue, is No. 22 on the Fortune 500.

Shares of Henry Schein closed at $132.47, up 87 cents.