San Francisco-based McKesson Corp. (NYSE: MCK) agreed to acquire cancer care firm Vantage Oncology, LLC, and oncology pharmacy services company Biologics, Inc., based in the Research Triangle. The sellers are various private equity and venture capital firms, and the combined transactions are valued at $1.2 billion.
Vantage Oncology is owned by a group of leading private equity and venture capital firms. The Vantage private equity investors include Oak Hill Capital Partners, Ares Capital, Camden Partners, and CCP Equity Partners. The venture capital investors include HLM Venture Partners, Meritech Capital, New Enterprise Associates (NEA), Salix Ventures, and Versant Ventures.
Biologics Inc. is a portfolio company of Investors Management Corporation (IMC), a private, closely held investment company founded in 1971 by James Maynard, former CEO and chairman of IMC from 1971 through 2015. He is also co-founder and chairman of Golden Corral Corp., a 500-restaurant chain owner and franchisor with $1.6 billion in revenue. IMC’s current chairman and CEO is Quinton Maynard. IMC is headquartered in Raleigh, North Carolina.
“We are excited about what Vantage can accomplish as part of the McKesson platform,” said Michael Fiore, CEO and co-founder of Vantage. “This combination brings together two highly complementary organizations with closely aligned goals and values. By joining together, we will be able to offer an exceptionally broad set of services to patients and physicians, and strengthen our leadership in community-based oncology and value-based cancer care.“
“This is a historic moment for our company,” said Stuart Frantz, president and CEO of Biologics. “I am absolutely thrilled that our team will be joining the McKesson family.”
“McKesson is committed to the success of our community oncology partners and customers and we believe the acquisitions of Vantage and Biologics complement our holistic approach to providing best–in-class care for oncology patients,” said John Hammergren, chairman and CEO, McKesson Corporation.
The acquisitions will be funded by a mix of cash and incremental debt and are expected to close in the first quarter of Fiscal 2017, subject to customary closing conditions, including necessary regulatory clearances.
Following the close of the transactions, both Vantage and Biologics will become part of McKesson’s Specialty Health business. McKesson expects the combined impact of these transactions to be approximately 11 cents accretive to adjusted earnings per diluted share in Fiscal 2017.
Collectively, these acquisitions will increase McKesson’s specialty pharmaceutical distribution scale, oncology-focused pharmacy offerings, solutions for manufacturers and payers, and scope of community-based oncology and practice management services available to providers and patients.
Founded in October 2002, Manhattan Beach, California-based Vantage Oncology will broaden McKesson’s scale in radiation oncology management services, adding more than 50 cancer centers across 13 states. Vantage operates a practice management model through joint ventures and shares profits with their partner physicians and hospitals. Vantage’s model of comprehensive oncology management services, including its focus on radiation oncology and urology, will complement and strengthen the existing offerings of McKesson and The US Oncology Network, keeping the business health of community-based oncology practices strong, while allowing patients to access the care they need in the most efficient and cost effective way.
Biologics will extend McKesson’s oncology expertise across the continuum of care for patients, allowing the company to engage its manufacturer partners in new ways and to enhance its value proposition to providers, patients and payers. The high-touch specialty pharmacy model provides controlled dispensing channels, including rapid and traceable pharmaceutical delivery solutions, increased analytics, and services for oncology patients, providing seamless care management. Since it was founded in 1994, Biologics has been dedicated to improving the lives of those fighting cancer. Privately held, Biologics maintains headquarters and operations in Cary, North Carolina.
McKesson Corporation, currently ranked 11th on the FORTUNE 500, delivers pharmaceuticals, medical supplies, and health care information technologies to the healthcare industry in the United States and internationally. The company operates in two segments, McKesson Distribution Solutions and McKesson Technology Solutions. The Distribution Solutions segment distributes ethical and proprietary drugs and equipment, and health and beauty care products. The Technology Solutions segment delivers enterprise-wide clinical, patient care, financial, supply chain, and strategic management software solutions; and connectivity, outsourcing, and other services, such as remote hosting and managed services to healthcare organizations. McKesson was founded in 1833 and is headquartered in San Francisco, California. The company has a market capitalization of $36 billion.