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The purchase price is approximately C$920 million (US$920.9 million), which McKesson expects to fund from its available cash.
After the closing, the banner and franchise operations will be integrated into McKesson's Canadian pharmaceutical distribution and services business, part of McKesson's Distribution Solutions segment. McKesson will also continue to serve as the primary pharmaceutical distributor to the Katz Group corporate-owned stores.
"The anticipated addition of the banner and franchise operations of Katz Group to our Canadian business reinforces McKesson's ongoing commitment to the independent segment," CEO John H. Hammergren said.
Under the terms of the agreement, McKesson will acquire substantially all of the assets of Drug Trading, which consists of a marketing and purchasing arm for a network of more than 850 independently-owned pharmacies located in Ontario, Western Canada and Atlantic Canada.
McKesson will also acquire Medicine Shoppe Canada Inc., which operates the franchise business of providing services to more than 160 independent pharmacies also located in Ontario, Western Canada and Atlantic Canada.
As part of the transaction, McKesson will also acquire joint ownership of the ProPharm software application, which supports pharmacy dispensary systems. ProPharm will work with McKesson through a transition period to ensure McKesson can continue to efficiently support independent banner members and franchisees when the transaction closes and thereafter.