Cardinal To Spin-off Clinical and Medical Products Businesses

Cardinal Health plans to spin-off its clinical and medical products businesses as a separate public company that will be led by current vice chairman David L. Schlotterbeck. The spin-off is expected to be completed by mid-2009. This plan is an effort to enhance management focus and strategic vision, as well as better align management and employee incentives with performance and growth objectives, according to the company.

Chairman and chief executive officer, R. Kerry Clark, will continue to lead Cardinal Health through the spin-off and then will retire from the company. He will be succeeded by George S. Barrett, who has served as vice chairman and chief executive officer of Healthcare Supply Chain Services since joining the company in January. Mr. Barrett has more than 25 years of experience in the health care industry, most recently serving as president and chief executive officer of North America for Teva Pharmaceuticals.

“Since 1996, Cardinal Health has built an industry-leading med-tech business that, as an independent company, would have the size and scale to stand on its own,” said Mr. Clark. “This business will be well positioned to deliver maximum value to customers and shareholders over the long term. We undertook a very disciplined exploratory process that involved our board, management and outside advisers. The result was a unanimous decision to move forward with the spin-off. This strategic decision will benefit Cardinal Health and the new med-tech company by allowing each business to focus on its unique growth strategies, capital needs and customer requirements, he continued.

 
In addition, Robert D. Walter will retire from the company’s board of directors when his term expires on November 5th. He will continue to serve as an adviser to the company. “I am fully supportive of our plans to spin off the clinical and medical products businesses and am confident that the two businesses will be well positioned as separate companies,” Mr. Walter said. “With strong teams in place to lead these two organizations, my retirement from the board is the next logical step in my leadership transition at Cardinal Health.”