US drug distributor McKesson to acquiire US Oncology in $2.16 billion deal
02 Nov 2010
In a bid to expand in cancer care and medicines, McKesson Corp, the biggest US drug distributor, has agreed to buy closely held US Oncology Inc for about $560 million.
The deal will be transacted with McKesson paying cash valued at $2.16 billion, including $1.6 billion in debt, according to John H Hammergren, chief executive officer of the San Francisco-based company.
US Oncology's community-based cancer treatment and research network operations are owned by private equity firm Welsh Carson Anderson & Stowe.
The Woodlands, Texas-based US Oncology will merge into McKesson Specialty Care Solutions, a unit established in 2008 with acquisitions of Oncology Therapeutics Network and National Oncology Alliance. According to analysts the deal significantly strengthens McKesson's position in cancer drug distribution.
The deal is likely to close by the end of the year and would be ''modestly beneficial'' to earnings, starting in the fiscal year, beginning April according to McKesson.
In the deal, McKesson was represented by New York law firm Skadden Arps Slate Meagher & Flom, while Boston law firm Ropes & Gray represented US Oncology.
US Oncology was represented by investment bank Morgan Stanley while Goldman Sachs Group Inc represented McKesson. Both Morgan Stanely and Goldman Sachs are based in New York.