Healthcare services and information technology company McKesson Corporation has completed the previously announced acquisition of Rexall Health for $2.9 billion CAD ($2.1 billion USD, or approximately $1.7 billion USD, net of certain estimated purchase price adjustments, proceeds from store divestitures, and tax benefits). This follows the agreement reached with the Competition Bureau of Canada for the acquisition of Rexall Health and approval received under the Investment Canada Act.
As part of the transaction, McKesson has acquired approximately 470 retail pharmacies, and has agreed to divest stores in 26 local markets that the Competition Bureau of Canada identified during its review of the transaction.
McKesson also announced that Domenic Pilla has been appointed CEO of McKesson Canada, effective January 3, 2017. Pilla will report to Paul C. Julian, executive vice president and group president, McKesson Corporation, and assume overall leadership responsibility for McKesson's distribution and retail businesses in Canada, including Rexall Health. Jürgen Schreiber, currently CEO of Rexall Health, will leave to pursue other opportunities.
With Rexall Health, McKesson will be able to serve a broad range of pharmaceutical care and ensure choice to consumers at a time when Canadians are increasingly turning to pharmacies for their healthcare advice and services.
Rexall Health will continue to have a dedicated management team in Canada under Pilla, while retaining the existing brand Canadians have come to know and trust. Pilla is expected to appoint a new president of Rexall Health in the future to provide day-to-day leadership for Rexall. His other direct report will be Paula Keays, president of McKesson Canada.
McKesson now expects Rexall Health to be flat to adjusted earnings per diluted share for Fiscal 2017 as earnings attributable to Rexall Health will be offset by an anticipated charge related to a fair value adjustment of acquired inventory. McKesson expects the acquisition will be 30 to 35 cents accretive to adjusted earnings per diluted share by the third year following the close of the transaction, on a constant currency basis.
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