9.25.09 | Chris Seper

Cardinal Health purchases $1.1 billion in debt, deals with stock downgrade

DUBLIN, Ohio — Cardinal Health started putting its CareFusion spinoff cash to work, announcing it purchased $1.1 billion in debt for $1.2 billion.

Cardinal received $1.4 billion in proceeds from the spinoff, which became official last month. Repurchasing the debt was expected; Cardinal said it would use the money to reduce long-term debt.

It was a bit of an up-and-down week for Cardinal. Its stock dipped after a Deutsche Bank analyst downgraded the stock from a “buy” to a “hold.” The analyst, Ross Muken, praised new CEO George Barrett’s changes at the company but said the impact of those changes are at least a year away. However, the stock started regaining lost ground on Friday.

Meanwhile, former CEO, R. Kerry Clark, is landing softly after his departure from Cardinal. Bausch & Lomb announced this week that Clark has joined its board of directors. The Associated Press reported this week that Clark in his final year at the company received more than $10 million in compensation — a 2 percent increase.