SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 21, 1997
(Date of Earliest Event Reported)
GENERAL MEDICAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 33-69874 94-2640465
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification
Number)
8471 Landmark Road, Richmond, Virginia 23228
(Address of principal executive offices, including Zip Code)
(804) 264-7500
(Registrant's telephone number, including area code)
Item 1 - Change in Control of Registrant.
Pursuant to an Agreement and Plan of Merger,
dated as of January 28, 1997 (the "Merger Agreement"), by
and among General Medical Inc., a Delaware corporation
("General Medical"), McKesson Corporation, a Delaware
corporation ("McKesson"), Spider Acquisition Corporation,
a Delaware corporation and a wholly owned subsidiary of
McKesson ("Merger Sub"), and certain stockholders of
General Medical named therein (the "Continuing
Stockholders"), Merger Sub has been merged with and into
General Medical (the "Merger"), with General Medical as
the surviving corporation in the Merger. The Merger,
which became effective on February 21, 1997, may be
deemed to constitute a change in control of the
Registrant, which is an indirect wholly-owned subsidiary
of General Medical. A copy of the Merger Agreement is
filed herewith as Exhibit 2.1 and is incorporated herein
by reference.
Pursuant to the Merger, each share of General
Medical held by the Continuing Stockholders formerly
representing the shares of General Medical common stock,
par value $.01 per share (the "Common Stock") and/or the
shares of Class A Common Stock, par value $.01 per share
(the "Class A Common Stock" and together with the Common
Stock, the "Shares"), was converted in the Merger into
the right to receive (i) 0.289 shares of the common
stock, par value $.01 per share of McKesson, together
with the associated Preferred Stock Purchase Rights of
McKesson (collectively the "McKesson Common Stock"); (ii)
an amount in cash equal to $11.934; (iii) the
Distribution Amount (as determined in the Merger
Agreement) upon the distribution thereof in accordance
with the Merger Agreement and (iv) any cash in lieu of
fractional shares of McKesson Common Stock as provided in
the Merger Agreement (the foregoing being collectively
referred to as the "Merger Consideration"), subject to
the terms and conditions of the Merger Agreement.
Each share of General Medical held by the
stockholders who were not parties to the Merger Agreement
(the "Non-Continuing Stockholders") formerly representing
the General Medical Shares was converted into the right
to receive (i) an amount in cash equal to $29.807 and
(ii) the Distribution Amount (as defined in the Merger
Agreement) upon the distribution thereof in accordance
with the Merger Agreement, subject to the terms and
conditions of the Merger Agreement.
The Distribution Amount, which is non-
transferable, relates to $30 million of the cash
consideration which was held back from the General
Medical shareholders and optionholders to be applied
against certain costs incurred by General Medical and
certain other defendants in connection with a pending
lawsuit involving General Medical.
McKesson paid approximately $347 million for
the equity of General Medical, approximately fifty
percent of which was in the form of 2,791,738 shares of
the common stock of McKesson, with the balance paid in
cash. In addition, McKesson assumed approximately $428
million in debt. In connection with the acquisition,
McKesson entered into a revolving credit facility (the
"Credit Facility") with Bank of America National Trust
and Savings Association (the "Bank"), dated February 21,
1997. Subject to the terms and conditions of the Credit
Facility, McKesson may borrow an aggregate amount not
exceeding $525,000,000 for the purpose of financing the
acquisition of General Medical and working capital
purposes related to the acquisition. The Credit Facility
will terminate on the earlier to occur of (i) the date
which is 180 days after the date on which all conditions
precedent set forth in the Credit Facility are satisfied
or waived, and (ii) the date on which the commitment
terminates in accordance with the provisions of the
Credit Facility. The Credit Facility also provides that
each loan shall bear interest at a rate per annum equal
to the Offshore Rate or the Base Rate, as the case may
be, plus the Applicable Margin (as such terms are defined
in the Credit Facility).
The Credit Facility contains certain covenants,
including covenants obligating McKesson (i) to comply
with the covenants set forth in a certain Credit
Agreement dated as of November 4, 1996, among McKesson,
the financial institutions party thereto, The Chase
Manhattan Bank, and the Bank, as may be modified and
amended, (ii) to reimburse and compensate the Bank for
certain costs and expenses incurred under the Credit
Facility, (iii) not to deduct any foreign taxes from any
payments it makes to the Bank, under certain
circumstances, and (iv) to use the loans obtained under
the Credit Facility for the purpose of financing the
acquisition of General Medical and working capital
purposes related to the acquisition.
Item 7(c) - Exhibits.
2.1 Agreement and Plan of Merger, dated as of
January 28, 1997, by and among General Medical
Inc., McKesson Corporation, Spider Acquisition
Corporation and certain stockholders named
therein, (Incorporated by reference to the
Current Report of Form 8-K, dated February 5,
1997, filed by McKesson Corporation (File No.
1-13252)).
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
GENERAL MEDICAL CORPORATION
(Registrant)
Date: March 5, 1997 By: /s/ Donald B. Garber
-------------------------
Name: Donald B. Garber
Title: Senior Vice President
