Business Context and Reporting Period
Company: McKesson Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: January 26, 2007
Event: Closing of the acquisition of Per-Se Technologies, Inc. ("Per-Se") and entry into a new interim credit facility to fund the transaction.
Key Financial Metrics
- New Debt Facility: Entered into a $1.8 billion unsecured interim term credit facility with a 364-day term.
- Facility Structure: Provided by Bank of America, N.A. (Administrative Agent) and Wachovia Bank, National Association (Syndication Agent).
- Use of Proceeds: Funds will be used to pay merger consideration for Per-Se, refinance Per-Se's existing indebtedness, and cover transaction costs.
- Future Financing Plan: The Company expects to replace the interim facility with permanent bond financing of up to $1.2 billion before the facility matures.
- Revenue/Profit/Cash Flow: The filing text does not provide specific revenue, profit, cash flow, or margin figures for the reporting period.
Material Changes
The primary material change is the increase in indebtedness due to the $1.8 billion interim credit facility established to facilitate the Per-Se acquisition. This facility is intended to be temporary and will be fully repaid upon the issuance of permanent bond financing.
Guidance, Outlook, and Risks
- Outlook: Management anticipates replacing the interim credit facility with permanent bond financing (up to $1.2 billion) prior to the end of the 364-day term.
- Mandatory Prepayment: The interim facility includes a provision requiring full repayment upon entering into the permanent bond financing.
- Related Party Transactions: Certain lenders and their affiliates have performed and may continue to perform commercial banking and investment banking services for the Company, receiving customary fees.
Investor Verification Checklist
- Verify the final terms and interest rate of the $1.8 billion interim credit facility.
- Confirm the timeline and successful issuance of the anticipated $1.2 billion permanent bond financing.
- Review the full press release (Exhibit 99.1) for details on the total purchase price of Per-Se Technologies, Inc.
- Monitor future filings for the impact of the acquisition on consolidated financial statements and leverage ratios.