Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, October 25, 2013

Article Excerpt

MCKESSON CORP., $154.99, New York symbol MCK, rose 10% this week to a new all-time high after it agreed to buy Celesio AG, a Germany-based firm that distributes prescription drugs in Europe and Brazil. The company will pay $8.3 billion for Celesio, which includes its debt. This is a big purchase for McKesson, which has a market cap of $35.4 billion. The deal should close sometime in 2014. The combined company will have annual revenue of $150 billion, and will serve over 120,000 hospitals and pharmacies in more than 20 countries. That will cut McKesson’s reliance on the U.S., which currently accounts for 90% of its revenue. The company’s bigger size will also help it negotiate lower prices from pharmaceutical makers. In addition, McKesson expects closing overlapping operations will save it $275 million to $325 million a year. The purchase should also add $1.00 to $1.20 a share to McKesson’s annual earnings in the first year, excluding integration costs. McKesson also reported earnings…