Dive Brief:
- The medical products distributor McKesson Corp on Wednesday announced it would be acquiring Rexall Health from Katz Group for $2.3 billion, boosting the San Francisco-based company's position within the Canadian pharmaceutical supply chain.
- Rexall Health is Canada's second largest drugstore chain, operating about 470 retail pharmacies. Mckesson said it would continue the brand's presence throughout Canada.
- Shares of McKesson have dropped 15% to 20% over the past three months, but perked up somewhat after news of the acquisition. The distributor said it would finance the acquisition with both cash and debt.
Dive Insight:
McKesson's deal follows it's 2012 acquisition of Katz Group’s pharmacy unit for $920 million. Rexall Health will become a part of McKesson's distribution chain, but it will maintain a management team and brand presence in Canada.
The company's decision to buy Rexall Health is a part of its goal to expand geographically and broaden its offerings. McKesson has already bought a drug distribution business in Belgium and invested $1.2 billion in two oncology acquisitions.
"The acquisition strengthens McKesson's position in Canada's pharmaceutical supply chain, and is a natural next step for two companies that have worked together for over 20 years delivering care to Canadians," the company said in a statement.
The transaction s expected to close in late 2016.
