McKesson Corporation today announced an agreement to purchase the pharmaceutical distribution division of UDG Healthcare (UDG) based in Northern Ireland (United Drug Sangers) and the Republic of Ireland (United Drug).
Under the terms of the agreement McKesson will acquire: United Drug and United Drug Sangers, leading wholesale operations across the Republic of Ireland and Northern Ireland; TCP, a leading home healthcare provider in the Republic of Ireland; and MASTA, UDG’s travel healthcare business based in the United Kingdom.
The transaction is subject to UDG shareholder approval and EU competition clearance, among other customary closing conditions and is expected to close in the first half of calendar year 2016.
More than 1,000 UDG employees will join McKesson as part of the acquisition. The acquired operations will be reported as part of McKesson’s International Pharmaceutical Distribution and Services business under the leadership of Marc Owen, Chairman of the Management Board at Celesio AG, the European business within McKesson’s Distribution Solutions segment.
Commenting on the proposed acquisition, Paul C. Julian, Executive Vice President and Group President for McKesson Distribution Solutions said: “We are extremely pleased to announce the execution of an agreement to add the pharmaceutical distribution business and other healthcare assets of UDG to McKesson’s European business. At McKesson, we are committed to providing our customers with more efficient delivery of healthcare products and services globally.”
Marc Owen, Chairman of the Management Board at Celesio AG, said: “The acquisition of UDG’s pharmaceutical distribution, home and travel healthcare businesses in Ireland and the UK, will strengthen our position in the industry. We have made this investment as part of our growth strategy which leverages the positive trajectory of the wider healthcare sector in Europe. This acquisition will also complement our broader portfolio of assets in both Ireland and the United Kingdom. We look forward to continuing UDG’s tradition of excellent customer service and to working with the UDG team.”
Today’s announcement follows McKesson’s recent agreement to acquire 281 pharmacies operated by Sainsbury’s in the United Kingdom. Both the UDG and Sainsbury’s acquisitions are expected to close in the first half of calendar year 2016. In the first 12 months following the close of both these acquisitions, McKesson expects the combined impact of these transactions to be between 10* to 14* cents accretive to its adjusted earnings per share. Both acquisitions are subject to merger control clearance and other closing conditions.
