CareFusion clears hurdles in $500M deal for a GE unit

CareFusion ($CFN) has bagged up U.S. and Chinese approval for its $500 million deal for GE Healthcare's ($GE) Vital Signs segment, closing in on a broader share of the market for anesthesia devices and disposables.

The San Diego-based respiratory giant announced its deal back in November but now has to complete a world tour of regulatory go-aheads before it can start doing business. Under the terms of the agreement, CareFusion gave GE $470 million in cash and will hand over the other $30 million once it has secured the remaining antitrust approvals. The company expects to wrap the deal by the end of March.

Vital Signs pulls in annual revenue of about $250 million through its line of single-patient-use devices, CareFusion said, and the U.S. and Chinese signoffs give the company expanded access to what it believes is a $3 billion global market.

"The acquisition of Vital Signs doubles the size of our specialty disposables business and transforms it into an industry leader by adding global scale and a new call point in anesthesia," CEO Kieran Gallahue said in a statement. "We are in a better position to serve customers in this large, global and growing market with a broader product portfolio and complementary expertise in respiratory and anesthesia care."

The specialty disposables unit was among the bright spots on CareFusion's earnings sheet last quarter, growing 10% to $68 million and helping the company's procedural solutions business jump 7% to $306 million. Meanwhile, CareFusion is still facing headwinds in its banner dispensing technologies business, which slipped 14% to $211 million, and total revenue slid 1% to $830 million.

For GE, the disposables divestiture allows the company to focus on its "core strengths" in imaging and diagnostic devices, healthcare CEO Tom Gentile said in November.

- read the announcement