McKesson to Acquire PSS World Medical for USD 1.62 Billion

McKesson Corporation (San Francisco, CA, USA), a health care services and information technology company, has agreed to buy PSS World Medical (Jacksonville, FL, USA) for USD 1.62 billion.

Under the terms of the agreement, McKesson will acquire PSS World’s distribution business of medical products to physician offices and long-term care homes, and will combine its own medical surgical business with the operations of PSS to offer medical supplies and other services to health care professionals. Within the combined entity, customers will have access to a broader array of medical products and services coupled with the additional convenience and efficiency of working with a single delivery organization.

McKesson will utilize each organization's distribution infrastructure, private label offerings, and sales and customer service teams to provide the best of both companies to customers. Following the close of the transaction, the combined business will be reported as part of McKesson's distribution solutions segment, and is expected to generate an additional USD 2.1 billion in annual sales for McKesson. The deal includes the assumption of about USD 480 million of debt, bringing its total value to USD 2.1 billion.

“The combination of McKesson's Medical Surgical business and PSS World Medical is an exciting next step in McKesson's commitment to improve business health and clinical performance across healthcare,” said John Hammergren, chairman and CEO of McKesson. “The unified organization will bring extensive distribution capabilities, deep product and technology expertise, and a broad portfolio of business services to an expanding industry, helping our customers improve efficiency and productivity, and deliver better care.”

“PSS World Medical and McKesson are both highly customer-focused companies with a shared commitment to strengthening the clinical success and financial health of caregivers by solving their most important problems,” said Gary Corless, president and CEO of PSS World Medical. “This transaction positions the combined business to advance this shared mission and enhance the value we deliver to physicians and extended care customers. This combination creates opportunities for our team members and greater value for the shareholders of both organizations.”

In January 2012, McKesson agreed to spend about USD 918 million for the marketing and franchising businesses of more than 1,000 Canadian independent pharmacies, by buying Drug Trading Company and Medicine Shoppe Canada from Katz Group Canada (Edmonton). Previously, in 2010, McKesson had bought US Oncology for about USD 2.2 billion, including debt.

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McKesson Corporation
PSS World Medical
Katz Group Canada