SAN FRANCISCO - McKesson Corp. a distributor of drugs and medical devices, said it has agreed to acquire Tel Aviv-based Medcon Ltd. for about USD 105 million.
McKesson said the purchase price is based on USD 3.05 a share, assuming cash exercise of all outstanding options. The company expects the transaction, which is subject to shareholder and regulatory approval, to close in its fiscal second quarter.
Medcon, which makes cardiac imaging software and systems, reported 2004 sales of about USD 17 million and will become a part of McKesson's Provider Technologies unit. The company has more than 300 system installations around the world, including more than 100 customers in North America.
While the acquisition will have no material effect on 2006 earnings per share, McKesson expects certain one-time costs to lower the operating profit of Provider Technologies in 2006. McKesson expects the acquisition to add modestly to the unit's operating profit and the company's earnings in 2007.
Analysts surveyed by Thomson Financial expect the company to earn USD 2.28 per share in 2006 and USD 2.63 per share in 2007.
Medcon CEO: Deal will boost efforts
"Less than 15 percent of hospitals in the United States have a robust, integrated solution for cardiology, which next to radiology is the largest producer and consumer of images and associated patient information," said Pamela Pure, McKesson Provider Technologies president, in a statement. "We see a significant opportunity to grow our position in a USD 250 million market category that's expected to encompass more than 1,500 decisions over the next five years.
Uzi Blumensohn, Medcon Chairman and CEO, said Medcon would enable McKesson to accelerate its efforts in the cardiac market with an effective solution and a satisfied customer base.
"McKesson and Medcon share a common vision of providing a single point of access to the patient's entire imaging record," he said. "As part of the McKesson family, we will be able to deliver unsurpassed integrated cardiac imaging solutions across the enterprise for optimized workflow and improved cardiac patient care."
Blumensohn and all other personnel associated with sales, installation, development and support will become part of McKesson Provider Technologies.
