DOW JONES NEWSWIRES
Cardinal Health Inc. (CAH) expects to record $261 million in
pretax costs for its spinoff of the CareFusion business.
Last week, Cardinal said its board approved splitting off the
faster-growing clinical and medical products business from the
company's much larger, core drug-distribution unit. The remaining
business has been hurt by hospital-spending delays, leading it to
cut jobs and try to control costs.
Cardinal, which has said it expects savings of up to $130
million in two years from the separation, has been hit with
hospital-spending delays. In response, it has been cutting expenses
and jobs.
Cardinal on Thursday said $113 million of the costs were
incurred in the fiscal year that ended June 30.
Of the $261 million total, $44 million will go to transaction
costs, $83 million to employee-related costs, $87 million to
separating functions and stand-up costs and $47 million to other
costs including financing expenses and accelerated depreciation.
The total doesn't include $45 million that CareFusion will incur
with the spinoff.
Overall, the $306 million estimate tracks closely with the $309
million Cardinal Health had expected.
Cardinal also expects a $150 million tax charge related to the
repatriation of cash held overseas.
In after-hours trading, Cardinal shares were unchanged at
$31.06. They ended the regular session up 2.6%.
-By Jay Miller, Dow Jones Newswires; 212-416-2355;
jay.miller@dowjones.com