By Connor Adams Sheets
Dublin, Ohio-based Cardinal Health announced it will be acquiring Kinray Inc., the Whitestone-based pharmaceutical distributor, for $1.3 billion in cash in a move that is expected to keep both the company and its jobs in Queens.
The purchase, which Cardinal hopes to complete by early 2011, will significantly expand Kinray’s ability to serve pharmacies in the northeastern United States and increase its retail independent pharmacy customer base by 40 percent to about 7,000 customers.
With annual sales in excess of $3.5 billion, Kinray currently serves more than 2,000 retail independent pharmacy customers, primarily in the New York metropolitan area, as a distributor of both branded and generic pharmaceuticals. In 2010, Forbes reported that Kinray was the 54th-largest private company in America, with revenues of $5.3 billion in 2009 and 1,100 employees.
“Joining forces with Cardinal Health supports Kinray’s mission to help retail independent pharmacies serve as an integral provider of care for our evolving health-care system,” Stewart Rahr, president and CEO of Kinray, said in a statement. “The combination of Kinray’s distribution model with the benefits of the value-added services offered by Cardinal Health will benefit our customers, making them even more efficient and successful in caring for their patients. It also provides our people with the opportunity to join one of the world’s premier health-care companies — one that understands the value we bring to the retail independent pharmacies we serve.”
Troy Kirkpatrick, a spokesman for Cardinal Health, said there are no plans for changes at the Whitestone facility, which the company plans to continue to operate.
“Kinray has developed a great service model for serving [its customers’] needs and we don’t plan to change that model. The customers will be served by the same sales folks they’re used to seeing, the same drivers they’re used to seeing, and they’ll be ordering through their normal process and serviced out of the same distribution center in Whitestone,” he said. “We’ll look at business needs, but they service the area well out of that facility currently so we don’t anticipate any immediate changes.”
Once the transaction is complete, Kinray customers will be able to make use of Cardinal Health services, including its Source(SM) Generics program, which has inventory management tools, reimbursement services, managed care contracting services, specialized care centers and local store marketing programs.
“We are excited to have the Kinray employees join the Cardinal Health family, and we look forward to their contributions,” said George Barrett, chairman and CEO of Cardinal Health. “Kinray has a longstanding service tradition with its customers. We intend to continue that tradition, utilizing its customer expertise and Whitestone distribution facility, while creating additional value for its customers through branded pharmaceutical programs, inventory and pharmacy management tools and Cardinal Health’s extensive generic drug program.”
Reach reporter Connor Adams Sheets by e-mail at csheets@cnglocal.com or by phone at 718-260-4538.
