McKesson Corporation Completes Divestiture of Canada-Based Rexall and Well.ca Businesses

Rhea-AI Summary

McKesson (NYSE: MCK) has successfully completed the divestiture of its Canada-based Rexall and Well.ca businesses to Birch Hill Equity Partners, a Canadian private equity firm, on December 30, 2024. The transaction, which was initially announced in September 2024, aligns with McKesson's strategic focus on capital deployment and prioritization of investments in expanding its oncology and biopharma growth platforms.

Positive

• Strategic divestiture allowing focus on core oncology and biopharma platforms
• Optimization of capital deployment through asset sale

Negative

• Reduction in Canadian market presence and revenue stream
• Loss of established retail pharmacy operations

Insights

Investment Strategist

This strategic divestiture marks a pivotal shift in McKesson's capital allocation strategy. The sale of Rexall and Well.ca to Birch Hill Equity Partners streamlines MCK's portfolio and frees up capital for its high-growth oncology and biopharma segments. While the transaction value isn't disclosed, this move aligns with the broader industry trend of healthcare companies refocusing on specialized, high-margin sectors. The oncology market, particularly, presents substantial growth opportunities with the global oncology drug market expected to exceed $400 billion by 2027. This portfolio optimization should enhance MCK's operational efficiency and potentially improve its return on invested capital (ROIC). The Canadian retail pharmacy market faces increasing competitive pressures and regulatory challenges, making this exit well-timed. By concentrating resources on specialized healthcare services and solutions, McKesson positions itself for stronger growth in segments with higher barriers to entry and better margins.

Healthcare Market Analyst

The divestiture of Rexall and Well.ca represents a calculated exit from the competitive Canadian retail pharmacy space, where margins have been under pressure from both online players and traditional rivals. McKesson's strategic pivot towards oncology and biopharma services capitalizes on the rapidly evolving healthcare landscape, particularly in specialty pharmaceuticals and precision medicine. The biopharma services market is experiencing robust growth, driven by increasing demand for complex drug development and distribution solutions. This reallocation of resources positions McKesson to capture a larger share of the specialty drug distribution market, which has been growing at approximately 10-12% annually. The timing of this divestiture is particularly strategic as it allows McKesson to redeploy capital into higher-growth areas while reducing exposure to the more cyclical retail pharmacy sector.

IRVING, Texas--(BUSINESS WIRE)-- McKesson Corporation (NYSE: MCK) reported today that on December 30, 2024 it has closed the transaction announced in September 2024 to sell its Canada-based Rexall and Well.ca businesses to Birch Hill Equity Partners, a Canadian private equity firm. This transaction enables the Company to focus capital deployment and prioritize investments expanding its strategic oncology and biopharma growth platforms.

Additional details related to the divestiture can be found on the company’s Investor Relations website.

About McKesson Corporation

McKesson Corporation is a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere. Our teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments and others to deliver insights, products and services to help make quality care more accessible and affordable. Learn more about how McKesson is impacting virtually every aspect of healthcare at McKesson.com and read Our Stories.

Cautionary Statements

Except for historical information, statements in this press release regarding McKesson’s capital deployment, investment and growth platforms constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that involve risks and uncertainties that could cause actual results to differ materially from those in those statements. It is not possible to identify all such risks and uncertainties. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are first made. Except to the extent required by law, the company undertakes no obligation to publicly update forward-looking statements. We encourage investors to read the important risk factors described in the company’s most recent Form 10-K filed with the Securities and Exchange Commission. These risk factors include, but are not limited to: we may be unsuccessful in achieving our strategic growth objectives; our use of third-party data is subject to limitations that could impede the growth of our data services business; we might be adversely impacted by changes in the economic environments in which we operate; and we might be adversely impacted by events outside of our control, such as widespread public health issues, natural disasters, political events and other catastrophic events.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241230684646/en/

Investor Relations

Rachel Rodriguez

469-260-2556

Rachel.Rodriguez@McKesson.com



Media

Media@mckesson.ca

Source: McKesson Corporation

FAQ

When did McKesson (MCK) complete the sale of Rexall and Well.ca?

McKesson completed the sale of Rexall and Well.ca on December 30, 2024.

Who purchased McKesson's (MCK) Rexall and Well.ca businesses?

Birch Hill Equity Partners, a Canadian private equity firm, purchased McKesson's Rexall and Well.ca businesses.

What is McKesson's (MCK) strategic focus after selling Rexall?

After selling Rexall, McKesson is focusing on expanding its strategic oncology and biopharma growth platforms.

When was the Rexall and Well.ca sale by McKesson (MCK) first announced?

The sale of Rexall and Well.ca was first announced by McKesson in September 2024.