Katz Group Canada Inc. has signed a definitive agreement for the sale of Drug Trading Company Limited and its franchise pharmacy business (Guardian, I.D.A), and Medicine Shoppe Canada Inc., to McKesson Corporation (NYSE: MCK) for approximately $920 million in cash.
McKesson will acquire substantially all of the assets of Drug Trading, the shares of Medicine Shoppe Canada and a joint ownership interest in ProPharm Limited’s pharmacy software application.
Katz Group will continue to supply Drug Trading’s Guardian® and I.D.A. TM banners and Medicine Shoppe Canada franchisees with Rexall branded OTC and health and beauty products. McKesson will continue to serve as the primary pharmaceutical distributor for Katz Group’s corporately owned stores, Drug Trading and Medicine Shoppe Canada.
“This transaction unlocks significant value through the sale of two outstanding but non-core assets. We will intensify our focus on our corporately owned Rexall and Rexall/Pharma Plus store network to accelerate the growth of our Rexall brand and the value proposition that it represents to our patients and customers. We will also accelerate the growth of our related real estate interests,” commented Daryl Katz, Chairman of Katz Group.
Katz Group also announced the acquisition of Dell Pharmacies by its Rexall division.
Dell Pharmacies is an operator of 18 store chain operating in Southern Ontario with approximately $70 million in annual sales. The Dell stores will be integrated into the Rexall network.