Healthcare Industry News:  durable medical equipment 

Devices Wound Care Mergers & Acquisitions

 News Release - February 14, 2006

McKesson Corporation to Acquire Sterling Medical Services

Acquisition Expands Homecare Capabilities and Medical-Surgical Supply Footprint Into Growing Alternate Site Markets

SAN FRANCISCO--(HSMN NewsFeed)--Feb. 14, 2006--McKesson Corporation (NYSE:MCK ), the world's leading healthcare services company, and Coloplast A/S of Humlebaek, Denmark, today announced that McKesson has signed a definitive agreement to acquire Coloplast's wholly owned subsidiary, Sterling Medical Services, LLC. Sterling, located in Moorestown, New Jersey, is a national provider of medical supplies and health management services to the homecare market. Terms of the agreement were not disclosed.

The acquisition is expected to close in McKesson's 2007 fiscal year, subject to customary conditions. Upon completion, Sterling will become part of McKesson Medical-Surgical's homecare business.

"Sterling's focus on serving the supply needs of homecare patients with chronic illnesses is a perfect complement to McKesson's growing homecare business," said Gary Muensterman, president of McKesson Medical-Surgical. "The combination of Sterling's direct-to-patient distribution and billing capabilities and McKesson's national distribution footprint for home healthcare agencies and Home Medical Equipment/durable medical equipment providers will create synergies that will benefit providers, payors and patients," added Muensterman. "This will ultimately improve the quality of care and create a more efficient model for serving patients in the home."

Muensterman noted that McKesson is the only company to offer a broad spectrum of services that address the personal health management of patients regardless of their location, be it in the hospital, in the home, at work or while traveling. McKesson's services include technology to monitor patients in the home, disease management programs, nurse triage services, physician-patient connectivity, online portal technology and personal emergency response systems.

Sterling Medical's 300 employees are dedicated to serving the chronic needs of patients with wounds, ostomies, incontinence and diabetes. Established in 1992, Sterling has developed a national network of customers ranging from payors to healthcare providers to home care patients. These constituents rely on Sterling to help meet the complex conditions of the homecare environment in a cost-effective manner while delivering high-quality service.

"We are excited to become part of McKesson," said David Kessler, president of Sterling Medical Services. "As healthcare providers and payors look for more efficient ways to meet the growing supply needs of chronic homecare patients, McKesson's national distribution footprint will better position us to meet those needs."

In addition to the Sterling acquisition, McKesson and Coloplast have signed a long-term supply agreement whereby McKesson will distribute Coloplast's ostomy and continence care products.

About Sterling Medical Services

Founded in 1992, Sterling Medical Services, LLC is a national provider and distributor of medical disposable supplies and health management services to the homecare market. Our customers include managed care organizations and other health insurance plans, home health nursing agencies, physician practices, rehab facilities, out-patient clinics, hospital discharge nursing, and individual patients.

About McKesson

McKesson Corporation (NYSE:MCK ), currently ranked 15th on the FORTUNE 500, is a healthcare services and information technology company dedicated to helping its customers deliver high-quality healthcare by reducing costs, streamlining processes and improving the quality and safety of patient care. Over the course of its 173-year history, McKesson has grown to provide pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients. For more information, visit us at

Source: McKesson

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