- McKesson is looking into a deal for its IT unit so it can better focus on its core drug-distribution business, The Wall Street Journal reported.
- Options for the IT business may include a sale or a merger, sources told the Journal.
- No details have yet surfaced on whether a deal is certain or whether it would be for the entire business.
McKesson's IT business, called Technology Solutions, is a significant player in the healthcare industry, providing software, services and consulting to providers. It recorded $2.9 billion in sales in its last fiscal year and an operating profit of $519 million. It could be worth an estimated $5 billion.
However, as the Journal notes, the IT business is small change compared to McKesson’s drug-distribution business which saw $188 billion in sales in the last fiscal year and an operating profit of $3.6 billion.
It should be no surprise if McKesson moves to divest given the company is no stranger to narrowing its focus to improve its profit margins. The Journal noted Chief Financial Officer James Beer stated last year the company is “prepared to re-look at the portfolio on a continuing basis to figure out what fits and what doesn’t fit.” The decision comes as the company also deals with recent layoffs of around 1,600 employees and cost reductions in response to price pressures attributed to consolidation among its customers.