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Transcript of McKesson Presentation
Technology Leverage The Profitability Story The Growth Story The Risk Story When looking for an acquisition,
McKesson buys: Distribution IT The deal $2.16 Billion $1.7B in debt and call penalties $415M Cash That's a buck a share. why it makes sense specialty higher margins stable growth start with cancer...
grow to other specialty 22.4% IRR resistant to major reimbursement change when McKesson buys distribution, they buy: Volume margins differentiated by service 2x ROI for the private equity guys specialty drugs represent the highest margins and are the industry growth market People are getting older =
more drugs, more doctor visits specialty drugs require special storage, delivery, services, administration end game? basically, you can't just swing by CVS for your chemo It's all about IT the ecosystem ~$75B industry revenue comes from specialty and let's face it...
USO was in a world of hurt they paid dividends with debt and then paid the interest with more debt the risk story the growth story the profit story The players McKesson Fortune 14 company
Focused on drug distribution
$109 Billion in revenue
97% from distribution
3% from technology services US Oncology Oncology Practice Solutions
Suite of services: Group purchasing, clinical guidelines, IT services, research
$3.5B in revenue
67% from distribution
33% from services
Private equity holders ready to sell limited ability to use operating cash flows
to grow the business and collectors will be knocking in 2012 but it wasn't all bad news for USO 11.7 million people diagnosed with cancer are living in the US Evidence based care
and data capture how do you measure the
cost and quality of medical care
unless you measure outcomes? downward pressure on pricing complex diseases with personalized treatments