McKesson Corporation (NYSE: MCK) has inked a deal with Quadrifolia Management GmbH to vend its Austrian business.
The recent deal forms part of the company’s strategy to fully exit the European region. Previously, the company has inked agreements to sell businesses in the U.K., France, Italy, Ireland, Portugal, Belgium, and Slovenia.
Terms of the Deal
Per the terms, the company will sell Austria’s Herba Chemosan Apotheker-AG and Sanova Pharma GesmbH. The agreement is likely to conclude in Fiscal 2022, pending regulatory approvals.
A management buyout will be conducted by Quadrifolia, under which the existing management of the Austrian business will buy all of the Herba Chemosan Apotheker-AG and Sanova Pharma GesmbH shares, backed by Invest AG. Notably, Invest AG has backed businesses in Austria for over 25 years and aids new owners in enhancing innovation and competition.
McKesson CEO Brian Tyler said, “Today’s transaction marks another milestone in advancing McKesson’s intent to streamline the portfolio and prioritize investments in areas where we have deep expertise and are central to our long-term growth strategy. We are making good progress in executing our strategy to exit Europe and continue to evaluate suitable exit alternatives for our businesses in Norway and Denmark.”
Wall Street’s Take
On December 20, Ann Hynes, an analyst from one of the Top Research Firms, Mizuho Securities, maintained a Hold rating on the stock but lifted the price target to $250 (6.71% upside potential) from $236.
According to Hynes, increased earnings visibility, a reduction in legislative risk, an improved economic backdrop, and minimal exposure to supply chain and other inflationary risks compared to other sectors are likely to drive the performance of the managed care sector in 2022.
Shares of McKesson have rallied 36.7% over the past year. The stock scores a Strong Buy consensus rating based on 11 Buys versus 2 Holds. The average McKesson price target of $270.08 implies 15.29% upside potential to current levels.
TipRanks’ Hedge Fund Trading Activity tool shows that confidence in McKesson is currently Very Positive, as the cumulative change in holdings across all 12 hedge funds that were active in the last quarter was an increase of 372,000 shares.