Cardinal med ed on block

Cardinal Health is offering its medical-education business for sale as part of a plan to divest its Healthcare Marketing Services (HMS) division.

Cardinal discontinued operations in HMS, which also includes marketing and contract sales services businesses, and took a $200 million write-down on the division, along with UK-based Intercare pharmaceutical distribution.

The firm said it has “entered into discussions with several interested parties” for both units, with the divestments aimed at shedding “non-strategic assets.”

Cardinal acquired the med-ed business in 2002 when it bought Boron, LePore & Associates (BLP). A source familiar with the BLP deal estimated the purchase price at $260 million on revenues of $100 million.

According to Lehman Bros. analyst Larry Marsh, BLP was one of several firms bought to “broaden [Cardinal's] footprint” in serving the drug industry.

The company then had to restate financials for 2002–04 and may “not necessarily have focused on growing businesses it was acquiring,” Marsh said.

Marsh said he doesn't think the write-down reflects a degradation of BLP's market value but, rather, is “a reflection of what people are willing to pay for the asset in this environment,” which has seen more regulatory scrutiny the last few years. 

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