Cardinal Health to buy Solaris Health for $1.9 billion, posts weak results

Aug 12 (Reuters) - Cardinal Health CAH.N said on Tuesday it will buy healthcare management firm Solaris Health for $1.9 billion in cash, as the drug distributor looks to expand its specialty business.

Shares of Ohio-based Cardinal fell nearly 6% after it also reported fourth-quarter revenue slightly below estimates, hurt by the loss of contracts with UnitedHealth Group's UNH.N OptumRx, one of its largest customers.

The company is buying Solaris through its unit called The Specialty Alliance. Cardinal will own about 75% of the healthcare management unit after the acquisition.

The deal is worth about $2.4 billion in total including roughly $500 million in rollover equity from Solaris' physicians, as they chose to reinvest some of their equity into the new structure.

Cardinal's specialty business includes costly medicines to treat complex conditions such as cancer and rheumatoid arthritis, and the deal gives it access to a network of community urologists across more than 750 providers in 14 states.

Solaris provides administrative and management support services to healthcare providers in the urological field.

Drug distributors, including Cardinal and rival McKesson MCK.N, have been acquiring community care operators to gain access to specialty care providers and diversify the high-margin business.

Cardinal struck a $1.12 billion deal last year to buy community cancer center operator Integrated Oncology Network to expand into cancer care.

The company also reported fourth-quarter revenue that remained flat year-over-year.

Its revenue of $60.16 billion came in shy of analysts' average estimate of $60.87 billion, according to data compiled by LSEG.

Cardinal raised its 2026 profit forecast on Tuesday, betting on strong demand for costly specialty medicines and branded drugs.

It expects annual adjusted per-share profit of $9.30 to $9.50, compared with $9.10 to $9.30 forecast previously.

Adjusted profit per share of $2.08 narrowly beat estimates of $2.04.

Cardinal said it would buy Solaris from private equity firm Lee Equity Partners and the deal is expected to close by the end of the year. The company plans to finance the deal with a combination of cash on hand and new debt financing.