U.S. drug wholesaler McKesson Corp struck a deal to purchase medical products distributor PSS World Medical for $1.46 billion to boost scale and margins in its surgical devices supply business, amid falling medical procedure volumes.Patients have been reluctant to spend on elective procedures in a weak economy, hurting sales at the companies making surgical devices, as well at the distributors, such as McKesson, that supply them.Analysts termed the deal a good buy, despite PSS's not-so-impressive financial performance over the last five quarters."This is, I think, a happy marriage for both sides, in that you're bringing the strong operational expertise of McKesson, (and) you're bringing the pretty good customer and sales network of PSS (together)," ISI Group analyst Ross Muken said.
PSS World Medical, Inc. (PSSI) is a national distributor of medical products and supplies, diagnostic equipment, healthcare information technology and pharmaceutical products, and provides professional and consulting services to the physician, long-term care, assisted living, home health care, and hospice markets. Shares of PSSI traded higher by 32.69% or $7.06/share to $28.66. In the past year, the shares have traded as low as $18.64 and as high as $25.99. On average, 815234 shares of PSSI exchange hands on a given day and today's volume is recorded at 41593652.
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