CareFusion cares about eliminating confusion and infection in hospital settings. It sells medical equipment - infusion and respiratory ventilation systems - and accompanying disposables for infection prevention. The company's Pyxis automated medication dispensing units cut down on clinician error when dealing with patients in critical care settings. Its Alaris infusion products include software to reduce IV medication errors. The company also makes AVEA respiratory ventilation devices, SensorMedics pulmonary care products, and V. Mueller surgical instruments. Other products and software help prevent the spread of hospital-acquired infections. Medical equipment maker Becton Dickenson is buying CareFusion.
CareFusion operates in two segments -- medical systems and procedural solutions. The medical systems segment accounts for two-thirds of sales and includes companies that develop, manufacture and sell big-ticket, durable equipment systems including the medication dispensing, infusion, and respiratory ventilation systems.
The procedural solutions businesses make single-use, disposable products for infection prevention, as well as for use with its equipment offerings. Disposables include skin antiseptic products, ventilator circuits, and IV infusion administration sets. The procedural solutions business also makes reusable surgical instruments.
While three-fourths of its sales are made in the US, CareFusion's products are sold in 130 countries around the globe. The company is working to expand in international markets by tailoring its offerings to the medical safety needs in both developed and emerging markets.
CareFusion has 11 US manufacturing facilities and another 14 throughout the world.
Sales and Marketing
CareFusion's medical systems are sold through a direct sales team in the US and through distributors internationally. Its procedural solutions segment also sells through a combination of sales representatives and third-party distributors. Customers for both segments are hospitals, surgical centers, long-term care facilities, and physicians' offices, as well as wholesalers. CareFusion also distributes some products made by other manufacturers.
Several years of revenue growth continued in 2014 as CareFusion reported $3.8 billion in revenue, an 8% increase from the previous year's $3.6 billion. Specialty disposables drove a 19% revenue increase for the procedural solutions unit along with other acquisition-related increases. Medical systems reported 3% growth.
Net income also continued to rise, up 8%, from $385 million to $417 million, based on the strong revenue growth and the fact that CareFusion was no longer setting aside $41 million for a possible IRS settlement. Cash from operations grew 12%, from $614 million to $685 million, on the strength of revenue growth as well.
In late 2014 CareFusion accepted a $12.2 billion bid from fellow medical equipment maker Becton Dickinson (BD) to purchase the company. The move gives CareFusion access to BD's established global distribution system and helps BD reach its goal of becoming more customer-focused.
CareFusion's growth plans are built upon new product introductions and enhancements, as well as acquisitions. In 2014 it launched more than a dozen new products including Pyxis and ChloraPrep line extensions as well as new disposable infusion products.
At the same time, the company has been tidying up its operations in recent years through cost-reduction and restructuring efforts, shedding a handful of businesses. In 2012 the company sold its neurodiagnostic and monitoring products business, Nicolet, to Natus Medical for $58 million. Sales in 2011 included its OnSite Services unit, which provided surgical instrument repair and equipment management services, to investment group Frazier Healthcare.
Mergers and Acquisitions
The company widened its presence in the respiratory care and anesthesiology markets in 2013 when it acquired the Vital Signs business of GE Healthcare for some $500 million. The purchase also expanded CareFusion's manufacturing and development operations in the disposable medical supply market (where it primarily operates as a distributor).
Also in 2013 the company acquired Spanish disposable infusion maker Grupo Sendal to increase its presence in the Western European market.
In 2012 CareFusion strengthened its procedural solutions business in the UK by acquiring medical products distributor U.K. Medical Holdings for an undisclosed amount. Also that year, the company strengthened operations in emerging markets by purchasing Brazilian respiratory equipment firm Intermed.
In addition, CareFusion purchased Seattle-based PHACTS for an undisclosed amount. The acquisition complements its Pyxis dispensing technologies portfolio by adding PHACTS' pharmacy inventory management software and automation solutions, allowing the company to offer its clients improved control of inventory and costs.
In 2011 CareFusion moved to increase its presence overseas, as well as bolster its Pyxis holdings, by acquiring German company Rowa for about $150 million. Rowa makes robotic drug storage and retrieval systems used in pharmacies (both retail and hospital) for high-speed, automated medicine management, with more than 3,500 systems installed in 30 countries.