McKesson to acquire US Oncology in a deal valued at $2.16 billion

One of the USA’s biggest drug distributor and health care services and information technology company, McKesson Corp (NYSE: MCK), has signed a definitive agreement to purchase all outstanding shares of closely-held US Oncology, a physician practice management company for oncologists, for cash. The total transaction, including the assumption of US Oncology’s outstanding debt of about $1.6 billion, is valued at around $2.16 billion.

The combined organization will focus on providing a comprehensive offering of solutions for the oncology industry, one of the fastest growing segments in health care. The parties are targeting a closing by the end of this calendar year, subject to customary conditions, including all necessary regulatory clearances.

Jefferies analyst Richard Close, quoted by Forbes magazine, likes the deal, noting that: “US Oncology currently distributes about $2.4 billion worth of oncology pharmaceuticals annually, operates 83 comprehensive cancer centers, offers practice management services to practices, and has a network of around 1,300 affiliated physicians. The company has annual revenues of about $3.5 billion, according to the web site of its current owner, Welsh Carson, which bought the business in 2004.