Aurelius acquires McKesson UK

Image from Lloyd’s Pharmacy’s website

European asset management group Aurelius has acquired McKesson UK in a corporate carve-out from US healthcare company McKesson Corporation based in Irving, Texas.

The deal with an enterprise value of £477 million will be completed by Aurelius’s newly launched co-investment structure with Aurelius European Opportunities Fund IV controlling a 70% stake and Aurelius Equity Opportunities SE & Co controlling 30%.

The transaction is expected to close in the first quarter next year.

The McKesson UK business comprises Lloyds Pharmacy, as well as wholesale pharmaceuticals distributor, AAH Pharmaceuticals, and generated more than £5 billion in revenue last year.

McKesson UK operates four divisions: retail, digital, homecare and wholesale. The business has more than 18,000 employees, including pharmacists, nurses, logistics operatives, as well as store, warehouse and administration personnel.

Dr Dirk Markus, founding partner of Aurelius, said: “I am very excited about the transaction which marks a new milestone in the development of Aurelius, lifting the whole organisation to a new level. This major transaction validates the strategic decision to raise Aurelius European Opportunities Fund IV. We now have available capital of more than €500 million and are looking forward to further exciting opportunities.

“I would like to thank McKesson for placing its trust in us. Our agreement with McKesson builds on Aurelius’s proven track record as a trusted investor in corporate carve-outs, leveraging Aurelius’s operational expertise to grow portfolio companies. A special thank you also goes to our investment team all of whom played an important role in reaching this stage. I am looking forward to the management and operational team providing their expertise and know-how in supporting the business under new ownership.”

Aurelius partner Tristan Nagler added: “We see significant potential in all four segments of McKesson UK to grow and enhance the business along with delivering further benefits to customers through additional investments – for example in digitalisation measures and other initiatives to further increase the quality and reliability of service for the patients and communities that McKesson UK serves. The transaction with McKesson reaffirms that Aurelius is well-positioned and well-regarded in the European mid-market as a pan-European asset manager offering sustainable value creation for its stakeholders.”

Aurelius was advised by Rothschild & Co (corporate finance), PwC and FRP (financial), Interpath (tax), Mayer Brown and DLA (legal), Cardano (pensions), Kearney (IT) and Mansfield (commercial).

Date published: November 1, 2021

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