CareFusion cares about eliminating confusion and infection in hospital settings. The company's Pyxis brand automated medication dispensing units cut down on clinician error when dealing with patients in critical care settings. Its Alaris brand of infusion products includes software to reduce IV medication errors. The company also makes AVEA respiratory ventilation devices, SensorMedics pulmonary care products, and V. Mueller surgical instruments. CareFusion's ChloraPrep and MedMined products and software help prevent the spread of hospital-acquired infections.
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 reorganized its operations into two new segments -- medical systems and procedural solutions -- in 2011. (Its operations were previously grouped under the critical care technologies and medical technologies and services segments.) 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.
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 distributes some products made by other suppliers. For instance, it has exclusive rights to distribute Fisher & Paykel Healthcare's respiratory and acute care products and systems for treating obstructive sleep apnea to US hospitals.
CareFusion increased revenue by 2% to $3.6 billion in 2012 due to higher returns (11% growth) in the medical systems segment on sales of medication dispensing and infusion equipment; the growth stemmed from increased product demand and both organic and acquisitive expansion measures. The growth was partly offset by a 5% decrease in sales within the procedural solutions segment, which was largely related to the divestiture of the onsite services business. Revenue growth in 2012 follows three years of declining revenues attributed to divestitures and restructuring efforts.
CareFusion's net income increased 20% to $293 million in 2012 due to lower sales, general, and administrative expenses, as well as lower costs from restructuring and acquisition integration efforts. Profits also increased in 2011 after a drop in 2010.
CareFusion's growth plans are built upon new product introductions and enhancements, as well as acquisitions. At the same time, the company has been tidying up its operations in recent years through cost-reduction and restructuring efforts.
CareFusion has shed a handful of businesses of late. 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.
The company also sold its international surgical products distribution unit to Medline Industries for $130 million in 2011. As part of the deal, Medline continues to distribute CareFusion surgical products in certain European and Asian markets, allowing CareFusion to focus on expanding sales of its core medical technologies and disposables in international markets.
Mergers and Acquisitions
The company moved to widen its presence in the respiratory care and anesthesiology markets in 2013 when it agreed to acquire the Vital Signs business of GE Healthcare for some $500 million. The purchase also expands CareFusion's manufacturing and development operations in the disposable medical supply market (where it primarily operates as a distributor).
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.
Former parent Cardinal Health spun off CareFusion into a separate, publicly traded company in 2009.