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McKesson to buy Red Line
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September 30, 1998: 8:43 a.m. ET
Health-care supplier paying $230M for Novatis' long-term care unit
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NEW YORK (CNNfn) - Health-care supply management company McKesson Corp. said Tuesday it has agreed to purchase Novatis Pharmaceuticals Corp.'s Red Line HealthCare Corp. unit for $230 million in cash and debt.
Golden Valley, Minn.-based Red Line is a distributor of medical supplies and services to the extended care industry.
McKesson said Red Line will become a unit of McKesson General Medical (MGM), which is part of the McKesson Health Systems Group. The company also said it will combine MGM's long-term health-care business with Red Line's.
"The addition of Red Line expands and strengthens McKesson General Medical's presence in the attractive long-term-care and home-care sectors," said John Hammergren, McKesson Health Systems Group president.
McKesson said Red Line posted sales of approximately $375 million for the 12 months ending Aug. 31, 1998.
In August, McKesson canceled its proposed $2.25-billion bid to acquire AmeriSource Health after a federal court granted an injunction requested by the Federal Trade Commission to block the merger.
McKesson (MCK) shares closed at 92-3/16, off 13/16, in Tuesday trading. 
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