McKesson Corp. (NYSE: MCK), San Francisco, CA, has agreed to acquire PSS World Medical, Inc. (NASDAQ: PSSI), Jacksonville, FL, in a transaction valued at $2.1 billion.

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PSS World Medical and McKesson’s Medical Surgical business will combine to form a leading provider of medical supplies, services and technology to physician and extended care customers. With the combined entity, customers will have access to a broader array of medical products and services coupled with the additional convenience and efficiency of working with a single delivery organization.

Following the close of the transaction, the combined business will be reported as part of McKesson’s Distribution Solutions segment, reporting to Paul Julian, executive vice president and group president, McKesson Corp. Gary Corless, president and CEO of PSS World Medical, will become COO of the combined organization.