SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 4,
1996
McKESSON CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-13252 94-3207296
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
McKesson Plaza
One Post Street
San Francisco, California 94104
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(Address of principal executive offices) (Zip Code)
(415) 983-8300
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(Registrant's telephone number, including area code)
Item 5. Other Events.
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On October 4, 1996, the Registrant announced that it had
executed a definitive agreement to acquire substantially all
of the assets of the healthcare distribution business of
FoxMeyer Corporation. The text of the press release regarding
this announcement is set forth in Exhibit (99) to this Current
Report on Form 8-K.
Item 7. Financial Statements, Pro Forma Financial Infomation
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and Exhibits.
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(c) Exhibits
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(99) Press Release issued by McKesson
Corporation on October 4, 1996
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 thereunto duly authorized.
McKESSON CORPORATION
(Registrant)
Dated: October 9, 1996 BY /s/NANCY A. MILLER
Vice President and Secretary
EXHIBIT INDEX
Exhibit
No. Title
- ------- ---------------------------------------
(99) Press Release issued by McKesson Corporation on
October 4, 1996.
Exhibit (99)
McKesson Corp.
One Post Street, San Francisco CA 94104-5296 Tel 415 983
8300
Contact: Janet Bley
(415) 983-9357
McKESSON CORP. TO ACQUIRE ASSETS OF FOXMEYER CORP.
SAN FRANCISCO, Friday, October 4, 1996 (NYSE:MCK) -- McKesson
Corp. today announced that it has executed a definitive
agreement to acquire substantially all of the assets of the
healthcare distribution business of FoxMeyer Corporation. The
agreement, which provides for purchase through an expedited
auction process, will be submitted today to the United States
Bankruptcy Court in Delaware. Since its bankruptcy filing on
August 27, 1996, FoxMeyer has been operating as a debtor in
possession under the protection of Chapter 11 of the
Bankruptcy Act.
McKesson will pay up to $80 million in cash, subject to
certain adjustments, and will discharge FoxMeyer's obligations
under its debtor-in-possession financing with G.E. Capital
Corporation. After restoration of normal trade credit terms,
McKesson's total investment in the business will be
approximately $400 million.
On approval of certain provisions of the agreement by the
bankruptcy court, McKesson will provide $30 million to
FoxMeyer through participation in its existing debtor-in-
possession financing. These funds will provide further
borrowing availability and will facilitate the purchase of
approximately $100 million of additional inventory. The
increased inventory will help to restore FoxMeyer's customer
service levels.
Alan Seelenfreund, McKesson's chairman and chief executive
officer, said, "FoxMeyer's respected sales force has created a
large and impressive customer base. Our plan is to use
McKesson's considerable financial and technology strength to
provide customers with the quality service and uninterrupted
product flow critical to the success of their businesses."
"The acquisition of FoxMeyer clearly furthers our business
strategy," said Mark A. Pulido, president and chief operating
officer. "McKesson has made significant investments in
strategic initiatives to advance the success of our customers.
With this acquisition, these investments can be leveraged by
quickly rolling out our programs to FoxMeyer's broad base of
retail and institutional customers."
"This transaction will also allow McKesson to make significant
improvements in its cost structure. Through the integration of
these companies, we believe we can reduce annual fixed costs
by more than $80 million, achieving an operating expense ratio
of 3% by the year 2000." said Pulido.
"Depending on the speed of integration of our operating units,
we expect this transaction to be accretive to earnings within
90 to 180 days following the closing. Given McKesson's strong
balance sheet and positive operating cash flows, this
acquisition can be financed well within McKesson's targeted
debt to capital ratio and will not affect the company's
ability to pursue additional acquisitions or share
repurchases," said Richard H. Hawkins, vice president and
chief financial officer.
McKesson's newest retail offerings, CareMax(sm) and
OmniLink(sm), give community pharmacists a patient-centered
network and the on-line connectivity necessary to compete in
today's managed care environment. In May, McKesson launched
its newest retail offering, OmniLink(sm) Financial Systems,
which offers automated reconciliation and reporting services
as well as pre-funding services for third-party receivables.
In addition, this acquisition should substantially strengthen
McKesson's position in the hospital marketplace. FoxMeyer's
institutional customers will have access to McKesson Health
Systems' offerings, including Automated Healthcare Inc.'s
R(X)OBOT(TM), a hospital-based automated comprehensive
pharmaceutical cost management system.
"We are sensitive to the needs of FoxMeyer's customers and
employees. We intend to keep the entire FoxMeyer sales
organization and are still evaluating our needs with respect
to other employee groups. To retain continuity of the
workforce and minimize the inconvenience to customers, a
'stay-pay' incentive plan has been put in place," said Pulido.
In addition to the approval of the bankruptcy court, the
transaction is subject to various contractual conditions and
to expiration of waiting periods under the Hart-Scott-Rodino
Act. Assuming an expedited timetable in the bankruptcy
proceeding and regulatory approval, the company anticipates
the transaction closing sometime in November.
McKesson Corp., with annual revenues of $14 billion, is a
leading provider of pharmaceuticals and health care products
and services. Through McKesson Drug Co., McKesson Health
Systems and a Canadian subsidiary, Medis Health and
Pharmaceutical Services, the company is North America's
largest pharmaceutical and health care products distributor.
FoxMeyer Corporation and its affiliates, based in Carrollton,
TX, is a distributor of pharmaceuticals, health and beauty
aids and other products, and a franchiser and operator of
retail stores. It had sales of $5.5 billion in fiscal year
ended March 31, 1996.
Except for the historical information contained herein, the
matters discussed in this release are forward-looking
statements that involve risks and uncertainties that could
cause actual results to differ materially from those
projected. These include the speed of integration of the
acquired business as well as other risks detailed from time to
time in the Company's SEC reports. The Company assumes no
obligation to update the information in this release.
# # #
McKesson news releases are available at no charge through
McKesson's NewsOnDemand fax service.
To immediately receive an index of available releases, call 1-
800-344-6495 and press 2.
On the Internet, visit us on the World Wide Web at:
http://www.McKesson.com
