NaviHealth hopes deal with Cardinal Health brings growth

NaviHealth is selling a majority stake to Cardinal Health for $290 million in a deal that positions naviHealth to build new relationships as it tries to lower health care costs.

Brentwood-based naviHealth partners with health plans and health systems to monitor and arrange care for patients after they are discharged from hospital stays. Its clinicians and analysts use data to best place the patients in facilities or with the care they need to get desired results.

The deal with Cardinal, a Dublin, Ohio-based health care services giant, opens doors to new sectors and markets for growth, said Clay Richards, naviHealth chief executive officer.

Richards said the acquisition doesn't change naviHealth's strategy and that Cardinal Health offers ways to grow, specifically with relationships in pharmaceuticals.

​"We think it's an interesting opportunity," said Richards, adding the company gets some pharmaceutical data from its customers but itself doesn't have relationships.

The initial deal gives Cardinal Health a 71 percent stake in the company. It plans to buy the remaining stake over the next four years, giving the naviHealth deal an overall purchase price of $410 million, according to Cardinal Health.

NaviHealth will continue its operations out of Nashville with the existing management team, including Richards, running it.

The company wasn't looking for a new partner, but after spending time with executives at Cardinal Health, Richards said it became obvious the two companies' philosophies on care, delivery and growth aligned.

"The most basic, and the most important, thing is ... they share the same core values as we do, which is to be on the right side of health care," Richards said. "It's about how you deliver better outcomes for patients with lower costs: How do you solve the problems (with growing costs)? That's what we and Cardinal define as being on the right side of health care."

Michael Petras, president of Cardinal At Home, will oversee naviHealth, according to Cardinal.

Cardinal is financing the acquisition with cash on hand. It trades as CAH on the New York Stock Exchange and had $102.5 billion in revenue for its fiscal year ending in June.

Existing private equity investor Welsh, Carson, Anderson & Stowe will continue to have a stake in naviHealth, along with the management.

Reach Holly Fletcher at 615-259-8287 or on Twitter @hollyfletcher.