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PSS shareholders agree to McKesson merger

by Mark Basch, Contributing Writer

Shareholders of PSS World Medical Inc. on Tuesday approved the company's agreement to merge into McKesson Corp., clearing the last hurdle to completing the deal.

The deal is expected to close soon, President and Chief Executive Officer Gary Corless said after the brief stockholders meeting at PSS' office in the Enterprise Park Building in the Southpoint area of Jacksonville, near its corporate headquarters. He did not have an exact date but said it will close before the end of the current quarter.

Corless also said no decisions have been made about how the merger will affect PSS personnel and its offices.

"The big questions are still out there," he said.

PSS employed about 780 people in Jacksonville and 4,000 across the country when McKesson announced its $2.1 billion agreement to buy the company in October. McKesson CEO John Hammergren said at the time he was impressed with PSS' sales staff and hoped to keep those employees, but Corless said Tuesday the companies have not discussed those details.

"We're still separate companies until we close," he said.

Corless said company officials have been updating employees as best as they can about the merger details.

"We've told them what we know," he said. "We've been very transparent with frequent communications."

Before agreeing to the merger, PSS was considering moving to new offices in Jacksonville. The Daily Record reported in November that an application was filed with the City Planning and Development Department Zoning Section for a six-story building on A.C. Skinner Parkway between Southside Boulevard and Belfort Road that included the PSS name.

PSS Executive Vice President and Chief Financial Officer David Bronson said Tuesday that the company has several options for its office space, but nothing has been decided.

"We're exploring all options," he said.

Corless said PSS officials will be discussing those matters with McKesson officials once the merger is completed.

"We're all anxious to be working with the leadership team," he said.

San Francisco-based McKesson is one of the largest companies in the U.S., ranking 14th in the Fortune 500 list of largest corporations. The company distributes pharmaceutical products, medical supplies and health and beauty care supplies, and also has a health care technology solutions division.

McKesson reported revenue of $91.8 billion in the nine-month period ended Dec. 31.

PSS, which distributes medical supplies nationwide, reported revenue of $1.3 billion in that period.

McKesson is paying $29 a share to buy PSS, a price which is a 34 percent premium to PSS' stock price before the merger was announced.

McKesson also agreed to assume about $480 million in PSS debt, making the total value of the deal $2.1 billion.

mbasch@baileypub.com

(904) 356-2466

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