San Diego’s Medical Technology Startups Get Reborn in CareFusion Spinoff
San Diego has long been known as an incubator for new technology companies. But as the hometown for established Fortune 500 companies, San Diego is barely on the map. You can count San Diego’s Fortune 500 companies on three fingers: Qualcomm (at No. 244), Sempra Energy (No. 252), and SAIC (No. 266).
This is because San Diego operates like a botanical nursery. Technology startups seeded here are typically sold and often transplanted. Sometimes part of a company’s operations remain in San Diego while corporate finance and other executive functions are consolidated elsewhere. That’s the way it was in 1996 when Dublin, OH-based Cardinal Health paid $920 million to acquire San Diego-based Pyxis, a medical technology startup that pioneered the development of computerized drug dispensing systems for hospitals. And again in 2004, when Cardinal paid $2 billion to acquire San Diego’s Alaris Medical Systems, a leading maker of intravenous drug pumps.
But now we’re watching a complete turn of the great corporate circle of life. Cardinal decided more than a year ago it was time to spin off its medical technology business—which includes Pyxis and Alaris—as CareFusion, a full-blown publicly traded company with 15,000 employees and roughly $3.7 billion in annual sales. David Schlotterbeck, who was a vice chairman at Cardinal and the CEO of Alaris, is heading CareFusion—which is headquartered in San Diego.
“I am very happy to see San Diego regain a large publicly traded company headquarters,” Pyxis CEO Ron Taylor said in an e-mail last week. “Over the years we have sold many local companies to bigger out-of-town buyers and lost the HQ.”
The spinoff becomes official tomorrow (September 1), when trading in CareFusion shares begins on the New York Stock Exchange under the symbol CFN. CareFusion shares began trading provisionally under the symbol CFN-WI just over a week ago, on Aug. 21, to establish a market for the stock, according to CareFusion spokesman Jim Mazzola. At noon today, they were trading at $19.02 a share, giving the new San Diego company a market valuation of more than $4.3 billion.
The split leaves Cardinal Health, the country’s No. 2 drug distribution company, with a more centralized focus on its core business. It also enables CareFusion to focus … Next Page »