Cardinal Health, a Fortune 500 Company and the second-biggest drug distributor in the US, today agreed to buy Healthcare Solutions Holding, a health care management solutions company for at least $517 million.

Cardinal will make an upfront payment of $517 million in cash and $150 million additional payments over the next three years if Healthcare Solutions reaches certain financial targets.

Dublin, Ohio-based Cardinal, currently ranked 17 on the Fortune 500 list, is a $96 billion health care services company that supplies pharmaceuticals and medical products to more than 60,000 locations in the US and Canada each day.

The company is also a leading manufacturer of medical and surgical products, including gloves, surgical apparel and fluid management products. In addition, the company is a supplier of medical products to clinical laboratories and operates the largest network of radio-pharmacies in the US that distribute products that aids early diagnosis and treatment of diseases.

Privately held Healthcare Solutions is the parent company of a number of subsidiaries including P4 Pathways and P4 Healthcare.

It provides comprehensive health care management solutions that help improve the quality of patients' health care outcomes and increase efficiency in the delivery of health care services.

The acquisition of Healthcare Solutions will expand Cardinal Health's current capabilities and reach in specialty pharmaceuticals, a segment of the market which, the pharmaceutical market data provider IMS Health, forecasts will grow at twice the rate of traditional pharmaceuticals for the next five years and exceed $100 billion in sales by 2013.

"This acquisition is an important building block in our strategy to create a differentiated set of services for oncology and specialty customers," said George Barrett, chairman and chief executive officer of Cardinal Health. "Healthcare Solutions Holding is a natural extension of Cardinal Health's businesses and will enable the growth of our specialty distribution operations."

"Cardinal Health is our ideal partner as we look to grow our business in oncology and other specialty therapeutic areas, as well as increase the scale and scope of our offerings," said Jeffrey Scott, M.D., chief executive officer of Healthcare Solutions Holding.