McKESSON TO PURCHASE PSS WORLD MEDICAL, INC. IN A TRANSACTION VALUED AT $2.1 BILLION
SAN FRANCISCO & JACKSONVILLE, Florida, October 25, 2012– McKesson Corporation (NYSE: MCK), a leading healthcare services and information technology company, and PSS World Medical, Inc. (NASDAQ: PSSI), announced today that the two companies have signed a definitive agreement under which McKesson will acquire all outstanding shares of PSS World Medical for $29.00 per share in cash. PSS World Medical and McKesson’s Medical Surgical business will combine to form a leading provider of medical supplies, services and technology to physician and extended care customers.
The total transaction, including the assumption of PSS World Medical’s outstanding debt, is valued at approximately $2.1 billion. The transaction, which has been approved by the boards of directors of both companies, is subject to customary closing conditions, including all necessary regulatory clearances and the approval of PSS World Medical’s shareholders. By the fourth year following the close of the transaction, McKesson expects to realize annual pre-tax synergies in excess of $100 million.
“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 H. Hammergren, chairman and chief executive officer, McKesson Corporation. “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.”
McKesson plans to utilize each organization’s robust distribution infrastructure, private label offerings, and sales and customer service teams to provide the best of both companies to customers. With 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.
“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 A. Corless, president and chief executive officer, 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.”
Following the close of the transaction, the combined business will be reported as part of McKesson’s Distribution Solutions segment, reporting to Paul Julian, executive vice president and group president, McKesson Corporation.
“We are extremely excited to bring these two great organizations together under two very talented leaders”, said John H. Hammergren, chairman and chief executive officer. “Stanton McComb, who will become president of the combined business, is a 10 year veteran of McKesson and has held various senior leadership roles in the company, including serving as the president of McKesson’s Medical Surgical business since March 2011. Upon the close of the transaction, Gary Corless, president and chief executive officer of PSS World Medical, will become chief operating officer of the combined organization. These two executives have outstanding track records of delivering results and building highly motivated teams, and we are excited about the opportunity to bring together the very best of these two organizations.”
As a result of this transaction announcement, PSS World Medical has cancelled its fiscal year 2013 second quarter conference call scheduled for today. PSS World Medical’s second quarter results will be announced with the filing of its quarterly report on Form 10-Q with the Securities and Exchange Commission.