par Brendon Nafziger
, DOTmed News Associate Editor | October 26, 2012
Health IT and drug distribution giant McKesson Corp. said Thursday that it would buy medical supplies company PSS World Medical Inc. in a deal valued at $2.1 billion.
The Fortune 500 company said it would buy all PSS' outstanding shares at $29 a share, a 34 percent premium on its Wednesday closing price. The deal includes taking up PSS' debt.
News of the transaction, which is subject to customary closing conditions, sent PSS World's stock soaring 33 percent Thursday.
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McKesson said PSS would be folded into its Distribution Solutions segment. Gary Corless, CEO and president of PSS, would become chief operating officer of the combined group, McKesson said.
"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." John Hammergren, McKesson's CEO and chairman, said in a statement.
McKesson said four years after the deal wraps up, it expects annual pre-tax "synergies" of $100 million.
PSS reported $74.3 million in income on annual sales of $2.1 billion for its most recent fiscal year, which ended in March.