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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
78
In 2008, we made the following acquisition:
−On October 29, 2007, we acquired all of the outstanding shares of Oncology Therapeutics Network (“OTN”) of
San Francisco, California for approximately $519 million, including the assumption of debt and net of $31
million of cash and cash equivalents acquired from OTN. OTN is a U.S. distributor of specialty
pharmaceuticals. The acquisition of OTN expanded our existing specialty pharmaceutical distribution business.
The acquisition was funded with cash on hand. Financial results of OTN have been included within our
Distribution Solutions segment since the date of acquisition.
The following table summarizes the fair values of the assets acquired and liabilities assumed as of the
acquisition date:
(In millions)
Accounts receivable $ 308
Inventory 87
Goodwill 240
Intangible assets 128
Deferred tax assets 62
Other assets 36
Accounts payable (311)
Other liabilities (31)
Net assets acquired, less cash and cash equivalents $ 519
Approximately $240 million of the purchase price allocation has been assigned to goodwill, which primarily
reflects the expected future benefits from synergies upon integrating the business. Included in the purchase
price allocation are acquired identifiable intangibles of $115 million representing customer relationships with a
weighted-average life of 9 years, developed technology of $3 million with a weighted-average life of 4 years
and trademarks and trade names of $10 million with a weighted-average life of 5 years.
In 2007, we made the following acquisitions and investment:
−On January 26, 2007, we acquired all of the outstanding shares of Per-Se Technologies, Inc. (“Per-Se”) of
Alpharetta, Georgia for $28.00 per share in cash plus the assumption of Per-Se’s debt, or approximately $1.8
billion in aggregate, including cash acquired of $76 million. Per-Se is a leading provider of financial and
administrative healthcare solutions for hospitals, physicians and retail pharmacies. The acquisition of Per-Se is
consistent with the Company’s strategy of providing products that help solve clinical, financial and business
processes within the healthcare industry. The acquisition was initially funded with cash on hand and through
the use of an interim credit facility. In March 2007, we issued $1 billion of long-term debt, with such net
proceeds after offering expenses from the issuance, together with cash on hand, being used to fully repay
borrowings outstanding under the interim credit facility (refer to Financial Note 12, “Long-Term Debt and
Other Financing”). Financial results for Per-Se are primarily included within our Technology Solutions
segment.