Moore Medical Weighs Two Offers

Call it the power of direct marketing that led two companies to offer to purchase New Britain, CT-based Moore Medical in January. On Jan. 20, San Francisco-based healthcare services behemoth McKesson Corp. agreed to acquire the $137.8 million medical supplies cataloger for about $40 million. Nine days later, Moore Medical entered into a confidentiality agreement with Bristol, TN-based SJ Strategic Investments, which was offering to buy the company for $15 a share — $3 a share more than McKesson offered.

In a release, Moore said that the agreement with SJ Strategic is mainly to allow the latter to complete due diligence. The decision is consistent with its rights under the McKesson agreement and does not mean the McKesson deal is dead. At press time, Moore’s board of directors were still evaluating the offers; they will make a decision before the end of June.

SJ Strategic’s interest in Moore Medical is not new. On Dec. 15 it had offered to buy the company for $12.50 a share in cash. It raised its offer to $15 a share on Jan. 21 but advised that a written response had to be received by Jan. 30.

Prior to the Jan. 29 announcement about the SJ Strategic offer, it looked like Moore was to become part of the $63.1 billion McKesson’s Richmond, VA-based medical-surgical business. Although Moore and McKesson competed for business in some larger physician practices, the acquisition would give both companies an opportunity to go after new markets. McKesson isn’t a presence in key Moore markets such as podiatry, corrections, and occupational healthcare. And Moore would get an opportunity to offer McKesson’s 300,000 SKUs of products, enabling it to better compete with the likes of Henry Schein and Darby Group. Moore currently offers about 15,000 SKUs, says Moore president/CEO Linda Autore.

Autore cannot comment further on the specifics of either pending deal due to confidentialty agreements. But as to why Moore is such a hot commodity, Autore points out that neither suitor has a direct marketing platform, “so they see our intregrated multichannel direct marketing model as a nice complement to their business.”

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