McKesson to Buy Per-Se Technologies for $1.8 Billion

By Kerry Young

Nov. 6 (Bloomberg) — McKesson Corp., the biggest U.S. drug distributor, will acquire software provider Per-Se Technologies Inc. for $1.8 billion, to expand its electronic data business sold to doctors, hospitals and pharmacies.

McKesson will pay $28 a share in cash for Alpharetta, Georgia-based Per-Se, the companies said today in a statement. That’s 15 percent higher than the Nov. 3 closing price of $24.45. The total price includes outstanding debt.

Already the distributor of a third of the drugs used in North America, McKesson also is competing with General Electric Co. and Siemens AG to sell technology that can speed the billing process and improve record-keeping in health care, an analyst said. Per-Se’s customers include 100,000 doctors, 3,000 hospitals and 50,000 pharmacies, according to the statement.

“McKesson is buying the reputation of Per-Se,” said Gene Mannheimer, an analyst with Caris & Co. in San Diego, in a telephone interview today. “It makes sense strategically.”

The acquisition may reduce per-share profit in fiscal 2008, which starts April 1, by 1 percent to 2 percent, said Larry Kurtz, a McKesson spokesman. The purchase will add to profit after that.

McKesson shares gained even with the prospect of a slight reduction in full-year profit, a sign investors support the strategy, said Mannheimer, who has an “above average” rating on Per-Se shares and doesn’t own them.

McKesson shares rose $1.04, or 2.1 percent, to $49.56 in New York Stock exchange composite trading as of 2:54 p.m. They have fallen 3.9 percent this year. Per-Se shares rose $3.05, or 12 percent, to $27.50 in Nasdaq Stock Market composite trading and 18 percent this year.

Per-Se today reported third-quarter profit of $6.76 million, or 16 cents a share, on revenue of $148.9 million.

McKesson on Oct. 31 reported third-quarter profit of $229 million, or 75 cents a share, on revenue of $22.4 billion. McKesson said the same day its fiscal 2007 profit from continuing operations would be $2.65 to $2.75 a share. The average estimate compiled by Bloomberg for McKesson’s fiscal 2008 profit, excluding certain items, is $3.11 a share. Full story

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