) recently announced that it has completed its previously
announced acquisition of PSS World Medical, Inc.
McKesson paid $2.1 billion for the acquisition including PSS
World Medical's debt of about $480 million and related
transaction costs. The acquisition was announced on Oct 25,
In Dec 2012, McKesson received a notification of early
termination of the waiting period under the Hart-Scott Rodino
Antitrust Improvements Act of 1976, in relation with its proposed
acquisition of erstwhile PSS World Medical Inc.
At the time of announcing the acquisition, McKesson had said
that it expects to generate more than $100 million in annual
savings (pre-tax) by the fourth year after the closure of the
deal. The deal acquisition is expected to add 15 to 25 cents per
share to the company's bottom line after a year of closing.
McKesson recently lowered its earnings guidance range for
fiscal 2013. The company now expects earnings (excluding special
items) in the range of $7.10-$7.30 per share (previous
projection: $7.15-$7.35 share).
The erstwhile PSS World Medical will be combined with
McKesson's Medical Surgical Distribution business. The addition
of PSS World Medical to the company's product line will bolster
the Medical Surgical Distribution business of McKesson.
We note that McKesson has been quite active on the acquisition
front recently. In Nov 2012, the company inked a deal with Emendo
Ltd. to acquire the latter.
McKesson currently carries a Zacks Rank #3 (Hold).
Nevertheless, stocks like
CVS Caremark Corporation
) which operate in the same sector as McKesson, currently look
attractive with a Zacks Rank #2 (Buy).
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CARDINAL HEALTH (CAH): Free Stock Analysis
CVS CAREMARK CP (CVS): Free Stock Analysis
MCKESSON CORP (MCK): Free Stock Analysis
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