Cardinal Health has reached an agreement to sell its Pharmaceutical Technologies and Services (PTS) segment to The Blackstone Group for approximately $3.3 billion in cash. Under the agreement, Blackstone will acquire the PTS businesses that develop, manufacture and package medication and other products for pharmaceutical and biotech firms. The business employs approximately 10,000 at more than 30 facilities worldwide and generates approximately $1.8 billion in annual revenue. Cardinal Health previously announced plans to focus resources on its four remaining segments serving health-care provider customers, such as hospitals and pharmacies.

“We made very rapid progress in less than two months to reach an agreement with such a quality organization as The Blackstone Group,” said R. Kerry Clark, president and chief executive officer of Cardinal Health. “The move allows us to accelerate the repurchase of Cardinal Health shares and focus our full attention on our mission to help make health care safer and more productive through our supply-chain and clinical products businesses.”

A statement from Chinh Chu, senior managing director of The Blackstone Group, and Alex Erdeljan, the Group’s senior advisor, read, “We are attracted to the strong industry fundamentals and leadership market positions of PTS in contract manufacturing, drug development, and packaging and printing services. We will work in concert with PTS’ proven and experienced management team to build upon and strengthen their platform of competitive offerings, in order both to accelerate and enhance the growth and profitability of the PTS businesses.”

The sale is expected to close early in Cardinal Health’s fiscal fourth quarter (mid-2007) and is subject to customary closing conditions, including regulatory approvals. Cardinal Health will retain Martindale and Beckloff Associates, two businesses that support the generic pharmaceutical market. Combined, these businesses have approximately 400 employees at two primary locations in the U.S. and UK.

In its second quarter (ended Dec. 31, 2006), Cardinal’s revenues were $21.8 billion, up 13%. Earnings in the quarter were $739.3 million as compared to $304 million in 2Q2005. YTD revenues were up 12% to $42.7 billion and earnings were up 90% reaching the $1 billion mark. Results for the PTS segment are included in discontinued operations for the quarter and YTD. The company also repurchased $300 million in shares in the quarter.