McKesson to acquire CoverMyMeds for approximately $1.1bn
Staff Writer |
On January 24, 2017, McKesson entered into an agreement to acquire CoverMyMeds for approximately $1.1 billion, or $0.9 billion net of incremental cash tax benefits.
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The agreement also includes a maximum $0.3 billion of consideration contingent upon CoverMyMeds’ financial performance through the fiscal year ending 2019.
CoverMyMeds is a privately-owned company headquartered in Columbus, Ohio, that provides electronic prior authorization solutions to pharmacies, providers, payers and pharmaceutical manufacturers.
The transaction is subject to customary closing conditions, including regulatory review, and is expected to close in the first half of Fiscal 2018.
McKesson Corporation reported that revenues for the third quarter ended December 31, 2016, were $50.1 billion, up 5% compared to $47.9 billion a year ago.
On the basis of U.S. generally accepted accounting principles (GAAP), third-quarter earnings per diluted share from continuing operations was $2.86, compared to $2.71 a year ago.
Third-quarter Adjusted Earnings were $3.03 per diluted share. Third-quarter results included pre-tax charges totaling $4 million, or approximately two cents per diluted share, related to the company’s cost alignment plan disclosed in March 2016 (the Cost Alignment Plan).
Third-quarter results primarily benefited from a lower tax rate, partially offset by a softer pricing environment in company's U.S. Pharmaceutical business within Distribution Solutions compared to the prior year.
For the first nine months of the fiscal year, McKesson generated cash from operations of $3.3 billion, and ended the quarter with cash and cash equivalents of $2.4 billion.
Through the first nine months of the fiscal year, McKesson paid $4.2 billion for acquisitions, repurchased $2.0 billion of its common stock, repaid approximately $390 million in long-term debt, invested $369 million internally and paid $192 million in dividends.
And company's expectation for full-year cash flow from operations remains consistent with company's original guidance. ■