Cardinal Health is purchasing Johnson & Johnson's Cordis, a medical device business specializing in heart products, for approximately $1.94 billion.
The deal, which was announced on Monday, signals the healthcare services company's entrance into the medical technology industry.
"We are extremely excited about the acquisition of Cordis," Cardinal Health Chief Executive Officer George Barrett said in a statement, according to Modern Healthcare.
"This is a significant step forward in our cardiovascular strategy-Cordis brings with it a long and proud legacy of cardiovascular innovation-this move highlights our commitment to address a major pain point in healthcare systems through innovative new approaches to the management of physician preference items."
Johnson & Johnson, like rival company Procter & Gamble, is making an effort to simplify its portfolio of investments, with the sale of Cordis serving as an example of the company's new strategy. This new strategy will focus on trademark brands that have led profits for Johnson & Johnson.
Cardinal Health shares rose $1.40 on Monday reaching $89.38, pointing to the likely possibility of increased earnings.
The company was founded in 1971 and is headquartered in Dublin, Ohio.
