McKesson to acquire Rexall Health for $2.2 billion

San Francisco-based McKesson Corp., an international healthcare services and information technology company, and Katz Group, Toronto, one of Canada’s largest privately owned enterprises, announced a definitive agreement for McKesson to acquire Rexall Health from Katz Group for $3 billion CAD ($2.2 billion USD*, or approximately $1.9 billion USD* net of the present value of incremental cash tax benefits). 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 companies said.

Rexall Health will continue to have a dedicated management team in Canada led by Schreiber, while retaining the existing brand Canadians have come to know and trust, the company said.

As part of the transaction, McKesson said it intends to acquire Rexall Health’s business, including approximately 470 retail pharmacies. This will bring McKesson Canada’s combined pool of talent to 13,000 employees, serving customers and patients throughout the country. Rexall Health will help McKesson leverage its existing portfolio of assets to drive growth along the entire value chain, particularly in two of Canada’s fastest growing regions, Ontario and Western Canada.

The acquisition, which will be funded by a mix of cash and debt, is expected to close late in calendar year 2016, the company said.