UPDATE 2-Cardinal Health's unit to acquire Canada's Futuremed
* Cardinal to buy Futuremed for C$165 mln
* Deal represents a premium of 31.5 pct to Futuremed's Monday close
* Futuremed shares touch offer price in early trade
Oct 25 (Reuters) - U.S. drug wholesaler Cardinal Health Inc's Canadian unit agreed to buy Futuremed Healthcare Products for about C$165 million in cash, to boost its presence in the country.
Since last year, Cardinal and McKesson Corp , two of the three largest U.S. drug wholesalers, have been aggressive acquirers as they look to expand their existing product line in different geographies and boost their share of specialty care.
Last year, Cardinal bought Zuellig Pharma China for $470 million and Kinray Inc for $1.3 billion, while McKesson Corp acquired privately held Oncology Inc for $2.16 billion, including debt.
The deal values Futuremed at C$8.15 a share, a premium of 31.5 percent to the stock's Monday's close.
Shares of Futuremed, which touched the offer price earlier, were trading at C$8.08 on Tuesday on the Toronto Stock Exchange -- indicating investors were not expecting a higher bid.
The transaction is valued "roughly around 11 times price to cash flow ... a reasonable valuation," said National Bank's analyst Trevor Johnson.
Futuremed distributes nursing home supplies and specialized furniture and equipment to the growing long-term care facilities sector like the U.S. company's Canadian unit.
"This is a natural extension for their distribution channel," Johnson said.
Futuremed recommended stockholders tender their shares to Cardinal Health's offer, while senior officers and directors of the company with a 5 percent stake have already agreed to do so.
Shares of Cardinal Health were down just over half a percent at $43.77 on the New York Stock Exchange.
- Exclusive: Angry with Washington, 1 in 4 Americans open to secession
- Secret Service investigates after man jumps White House fence, reaches doors
- French jets strike in Iraq, expanding U.S.-led campaign against Islamic State |
- Scots spurn independence in historic vote, devolution battle begins |
- Thousands of Syrian Kurds flee to Turkey as Islamic State advances |