McKesson Corporation Agrees to Buys PSS World Medical (PSSI) for $2.1 Billion
10/25/2012 8:15:04 AM
McKesson Corp. (MCK), the largest U.S. drug distributor, agreed to purchase PSS World Medical Inc. for about $2.1 billion to expand in providing medical supplies and services. The $29-a-share agreement to purchase the Jacksonville, Florida-based company also includes the assumption of PSS World’s debt, San Francisco-based McKesson said in a statement today. The offer is a 34 percent premium over PSS World’s closing share price yesterday. McKesson will acquire PSS World’s distribution of medical products to physician offices and long-term care homes and gain the company’s $2.1 billion in annual sales. Cost savings will be about $100 million a year within four years, McKesson said. “We view this deal positively as it should help McKesson to expand its presence and sustain margins in medical distribution,” said Ross Muken, an analyst with International Strategy and Investment Group in New York. The deal will add 20 cents to 25 cents a share to McKesson’s full-year earnings next fiscal year, he said in a note to clients. PSS World shares rose 32 percent to $28.52 at 8:32 a.m. McKesson gained less than 1 percent to $90.16.