McKesson’s $800 Million Acquisition of Medical Specialties Distributors


Davis Polk advised McKesson Corporation. MSD recieved legal counsel from Simpson Thacher & Bartlett LLP. Morgan Stanley & Co. LLC is acting as financial advisor to MSD.

New Mountain Capital, LLC , a growth-oriented investment firm that currently manages more than $20 billion in assets, has agreed to sell Medical Specialties Distributors to McKesson Corporation. New Mountain acquired MSD in December 2013. MSD’s enterprise value approximately tripled during New Mountain’s ownership driven by growth in revenue, earnings, and new products, as well as strategic acquisitions.

Founded in 1982, MSD provides supply chain, biomedical services, and technology solutions to healthcare providers operating in low cost alternate sites of care, including home infusion, long-term care, home health, and oncology providers.

Since New Mountain’s investment, MSD has continued to strengthen its leadership in the home infusion space while also significantly expanding its presence across the broader post-acute landscape, particularly within the long-term care, home health, and oncology segments. The company also has made substantial investments into new capabilities and technology solutions to drive additional value for its customers and enable continued growth well into the future. MSD added or created over 400 jobs during New Mountain’s ownership, net of any job losses, and total employment more than doubled.

The transaction is expected to close in the first half of McKesson’s FY 2019, subject to receipt of antitrust approval and other customary closing conditions.

Davis Polk Advises McKesson with a team including partner Alan F. Denenberg (Picture), counsel Jason Bassetti and associates Andrew Basham and Tierney O’Rourke. The tax team includes partner Neil Barr and associates Patrick E. Sigmon and Catherine L. Chu. Counsel Michele Ontiveros Gross and associate Jason J. Bang are providing intellectual property and technology advice. Partner Veronica M. Wissel and associate Timothy John Durbin are providing executive compensation advice.

Simpson Thacher advised New Mountain Capital, LLC and Medical Specialties Distributors with a team including Sebastian Tiller, Jeongseok Jay Yu, Della Fok and Katherine Smith (M&A); John Creed and Sophie Staples (Tax); Larry Moss, Alisa Tschorke and Stephan Bradley (Executive Compensation and Employee Benefits); Lori Lesser and Cecillia Xie (Intellectual Property); Dennis Loiacono (Real Estate); and Tom Bell and Catherine Kidd (Private Funds).

Involved fees earner: Alan Denenberg – Davis Polk & Wardwell; Jason Bassetti – Davis Polk & Wardwell; Andrew Basham – Davis Polk & Wardwell; Tierney O’Rourke – Davis Polk & Wardwell; Neil Barr – Davis Polk & Wardwell; Patrick Sigmon – Davis Polk & Wardwell; Catherine Chu – Davis Polk & Wardwell; Michelle Ontiveros Gross – Davis Polk & Wardwell; Jason Bang – Davis Polk & Wardwell; Veronica Wissel – Davis Polk & Wardwell; Timothy John Durbin – Davis Polk & Wardwell; Sebastian Tiller – Simpson Thacher & Bartlett; Jeongseok Jay Yu – Simpson Thacher & Bartlett; Della Fok – Simpson Thacher & Bartlett; John Creed – Simpson Thacher & Bartlett; Sophie Staples – Simpson Thacher & Bartlett; Laurence Moss – Simpson Thacher & Bartlett; Alisa Tschorke – Simpson Thacher & Bartlett; Stephan Bradley – Simpson Thacher & Bartlett; Lori Lesser – Simpson Thacher & Bartlett; Cecillia Xie – Simpson Thacher & Bartlett; Dennis Loiacono – Simpson Thacher & Bartlett; Thomas Bell – Simpson Thacher & Bartlett; Catherine Kidd – Simpson Thacher & Bartlett;

Law Firms: Davis Polk & Wardwell; Simpson Thacher & Bartlett;

Clients: McKesson Corporation; New Mountain Capital; Medical Specialties Distributors LLC;

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Author: Ambrogio Visconti