Cardinal Health CAH has agreed to acquire AdaptHealth's AHCO Diabetes Health business and Strive Medical for approximately $360 million in cash, subject to working capital adjustments. The tuck-in acquisitions strengthen Cardinal Health's at-Home Solutions segment by expanding its presence in diabetes management and urology while broadening its home-based care offerings.
The acquisitions are expected to enhance Cardinal Health's scale in the fast-growing home healthcare market and be accretive to non-GAAP earnings per share within the first year after closing. Backed by the successful integration of Advanced Diabetes Supply, the deals reinforce the company's strategy of driving long-term growth through targeted acquisitions and expanding its leadership in at-home medical supplies.
Likely Trend of CAH Stock Following the News
Shares of CAH have traded flat since the announcement on July 20. In the year-to-date period, shares of the company have gained 10.5% against the industry’s 0.8% decline. The S&P 500 increased 8.7% in the same time frame.
The acquisitions are expected to strengthen Cardinal Health's long-term growth by expanding its at-Home Solutions platform across high-demand therapeutic areas such as diabetes management and urology. The deals add more than 245,000 patients annually, broaden the company's direct-to-patient distribution network and create additional cross-selling opportunities.
Coupled with the successful integration of Advanced Diabetes Supply, these acquisitions should enhance operating scale, deepen customer relationships and support sustainable revenue growth and margin expansion, while reinforcing Cardinal Health's leadership in the rapidly growing home healthcare market.
CAH currently has a market capitalization of $52.87 billion.
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More on the News
The acquisitions further build on the foundation established by Cardinal Health's earlier purchase of Advanced Diabetes Supply ("ADS"), which has significantly strengthened its at-Home Solutions business. Management noted that the ADS integration has progressed ahead of schedule, with the company successfully migrating all ADS volume onto its technology-enabled distribution network. Since the transaction closed, Cardinal Health has onboarded nearly 500,000 new customers and introduced ContinuCare Pathway, a digital pharmacy-to-supplier referral program designed to simplify patient access to home-based care.
The acquisition of AdaptHealth's Diabetes Health business will meaningfully expand Cardinal Health's diabetes care franchise. The business serves more than 225,000 patients annually through a centralized, mail-order, direct-to-patient model, supplying products such as continuous glucose monitors for ongoing diabetes management. Meanwhile, Strive Medical adds a complementary portfolio focused on urology, wound care, ostomy and incontinence supplies, serving more than 20,000 patients annually. Together, these assets broaden Cardinal Health's capabilities across key therapeutic categories while increasing the scale of its home medical supplies platform.
Management believes that the transactions will further strengthen Cardinal Health's ability to deliver high-quality care at scale and support its long-term strategy of combining organic growth with targeted acquisitions. Subject to customary closing conditions and regulatory approvals, both deals are expected to be accretive to non-GAAP earnings per share within the first 12 months after closing. The company expects the expanded platform to enhance operational efficiencies, deepen customer relationships and reinforce its leadership position in the rapidly evolving home healthcare market.
Favorable Industry Prospect for CAH
Going by the data provided by Grand View Research, the global home healthcare market size is projected to grow from $504.8 billion in 2026 to $1015.8 billion by 2033, at a CAGR of 10.5% from 2026 to 2033.
The market is driven by rising demand for cost-effective alternatives to curb rising healthcare costs and the growing penetration of the virtual and remote care industry.
Recent Development by CAH
In April, CAH expanded its Actinium-225 (Ac-225) production capabilities at its Center for Theranostics Advancement in Indianapolis by adding a high-capacity production line to its Drug Master File. The move significantly boosts the supply of cGMP-compliant Ac-225 for investigational therapies and future commercial manufacturing.
Ac-225 is a key radionuclide used in targeted cancer treatments, including therapies for prostate, breast and neuroendocrine cancers. The expansion strengthens Cardinal Health's position in the fast-growing radiopharmaceutical market while helping address the industry's supply constraints.
CAH’s Zacks Rank & Other Key Picks
Currently, CAH carries a Zacks Rank #2 (Buy).
A couple of other top-ranked stocks from the broader medical space are West Pharmaceutical WST and Intuitive Surgical ISRG. WST sports a Zacks Rank #1 (Strong Buy), while ISRG carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical reported first-quarter 2026 earnings per share (EPS) of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%.
West Pharmaceutical has an estimated long-term earnings growth rate of 13.9%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 19.4%.
Intuitive Surgical reported first-quarter 2026 adjusted EPS of $2.50, which beat the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion surpassed the Zacks Consensus Estimate by 6.2%.
Intuitive Surgical has an estimated long-term earnings growth rate of 14.3%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
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Cardinal Health, Inc. (CAH): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).