UDG Healthcare to Sell Two Units to McKesson -- 2nd Update
September 18 2015 - 8:54AM
Dow Jones News
By Jana Simmons and Chelsey Dulaney
LONDON--Dublin-based UDG Healthcare PLC agreed to sell two of
its units to U.S. drug wholesaler McKesson Corp. for EUR407.5
million ($466 million).
The health care services provider said Friday it will sell its
Irish pharmaceutical distribution businesses and its U.K.-based
travel health care business to focus on its higher-growth,
higher-margin international health care services businesses.
"The overall value of the pharmaceutical market in the Republic
of Ireland has been in decline for a number of years...consequently
we are delighted that McKesson made an attractive offer for our
business," UDG Chief Executive Liam FitzGerald told reporters on a
conference call.
UDG Healthcare will use the proceeds from the disposals to repay
debt and invest in growth, both organic and via acquisitions. The
company said it would mainly look for M&A opportunities in the
U.S., followed by Europe and Japan.
UDG Healthcare also said Mr. FitzGerald would retire in March
after 23 years with company. He will be succeeded by Chief
Operating Officer Brendan McAtamney.
For San Francisco-based McKesson, the deal represents the latest
move to expand its European presence. The company earlier this year
struck a deal to buy 281 Sainsbury's pharmacies in the U.K., which
will be added to its Lloyds Pharmacy brand. McKesson expects both
deals to close in the first half of next year, and expects the
businesses to add 10 to 14 cents to its adjusted per-share
earnings.
In its latest quarter, ended in June, McKesson's international
pharmaceutical business made up just over 10% of its overall
revenue. Revenue in the segment fell 17% but was flat excluding
currency impacts.
UDG shares rose 5.7% to 521 pence. Shares of McKesson, up 4.4%
in the past year, were inactive in U.S. premarket trading.
Write to Jana Simmons at jana.simmons@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 18, 2015 08:39 ET (12:39 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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