McKesson agrees to buy PSS World Medical for $2.1 billion

McKesson Corp., San Francisco, signed a definitive agreement to purchase supply company PSS World Medical for about $2.1 billion, including the assumption of outstanding debt.

McKesson would pay approximately $1.46 billion in cash—or $29 a share—for the outstanding shares of PSS World, a Jacksonville, Fla.-based distributor of medical supplies and equipment to office-based physicians and long-term-care providers.

PSS World would be combined with McKesson's existing medical surgical business and be part of McKesson's Distribution Solutions segment, reporting to Paul Julian, executive vice president and group president of McKesson, according to a news release.

Stanton McComb, currently president of McKesson Medical Surgical, would become president of the new combined business, and Gary Corless, president and CEO of PSS World Medical, would become chief operating officer.

The deal, which has been approved by the boards of both companies, is subject to customary closing conditions, including receipt of shareholder approval.

Earlier this month, McKesson announced it had entered a deal to purchase Med3000, a Pittsburgh-based healthcare management and technology services company, for undisclosed terms.