Edmonton-based Katz Group is selling the Rexall Health drugstore chain, including its 470 retail pharmacies, in a C$3-billion deal with San Francisco-based health care company McKesson.
McKesson said the friendly deal is the next natural step to take between the two companies, which have worked together for 20 years.
The San Francisco-based firm previously acquired Katz’s independent outlets and franchise businesses – primarily operating as I.D.A. and Guardian – for about C$920 million in 2012.
McKesson Canada — which was founded more than 100 years ago — says it would have about 13,000 employees after the Rexall deal closes. The deal is expected to close later this year.
Rexall Health also includes Medicentres Canada, a group of family healthcare clinics in Edmonton, Calgary, London and Windsor.
“Canada’s healthcare environment is rapidly evolving; it is marked by a move of primary care into pharmacy and increasingly complex patient demand,” said John H. Hammergren, chairman and chief executive officer, McKesson Corporation.
“McKesson will bring together the strengths and expertise of our diverse portfolio to address challenges and opportunities in delivering the very best patient care,” he added.
The companies said Rexall Health will continue to be led by its current Canadian management team, headed by CEO Jurgen Schreiber.
The former CEO of Shopper Drug Mart, Schreiber was hired in 2015 to head up Rexall Health — the banner for all of the Katz Group’s health-related companies, including retail pharmacies.
Schreiber was chief executive at Canada’s largest pharmacy chain for four years until 2011, before it was acquired by Loblaws.
“I have the utmost confidence that Rexall Health will continue to flourish under McKesson’s ownership and Jürgen Schreiber’s continued leadership,” Daryl Katz, founder and chairman of Katz Group, said in a news release.
“Going forward, Katz Group will continue to invest in the growth of our three other lines of business: real estate, sports & entertainment, and private and public investments.”
The Katz Group is one of Canada’s largest privately owned enterprises. Its sports and entertainment division, the Oilers Entertainment Group, owns the NHL’s Edmonton Oilers, the WHL’s Edmonton Oil Kings and the AHL’s Bakersfield Condors. The OEG will operate the Rogers Place arena in downtown Edmonton when it opens in fall 2016.
According to Canadian Business Magazine, Katz Group founder Daryl Katz is Canada’s 14th richest person, with a net worth of $4.14 billion.
The Rexall Health sale is subject to review under the Investment Canada Act and by the Competition Bureau of Canada.
With files from The Canadian Press
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