Discontinued Operations

9 Months Ended

Dec. 28, 2012

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

Discontinued Operations

On May 8, 2012, the Company's Board of Directors approved a strategic restructuring plan designed to transform the Company. The restructuring plan included the sale of two businesses serving skilled nursing facilities and specialty dental practices, the integration of all distribution operations into one common distribution infrastructure, and the redesign of the Company's shared services segment. As of June 29, 2012, the Company determined that the businesses met the held for sale criteria, and therefore, the results are presented separately as discontinued operations within the accompanying Unaudited Condensed Consolidated Balance Sheets,Unaudited Condensed Consolidated Statements of Operations, and the Unaudited Condensed Consolidated Statements of Cash Flows.

On November 5, 2012, the Company completed the sale of its specialty dental distribution business to a third party (“Buyer”),pursuant to an Asset Purchase Agreement dated as of September 26, 2012. Under the Asset Purchase Agreement, the purchase price was $68,000plus an adjustment for the difference between the base working capital and the final closing working capital. The cash proceeds received during third quarter of fiscal year 2013 were reduced by approximately $1,467 for transaction costs. Cash proceeds received from the transaction were approximately $66,533. In connection with the closing of the transaction, the Company and the Buyer entered into a Transition Services Agreement, pursuant to which the Company will provide certain services to the Buyer for a period not to exceed one year. The incremental costs incurred related to providing services under the transition services agreement are included in general and administrative expenses and the reimbursement for these expenses are included in other income in the accompanying statements of operations.

The results of operations of the specialty dental distribution business and the estimated gain on sale have been classified as discontinued operations. The estimated gain on sale is subject to change based on final measurement period adjustments made to the purchase price.

Theassets and liabilities of discontinued operations included on the Unaudited Condensed Consolidated Balance Sheets as of December 28, 2012 and March 30, 2012 are as follows:

		December 28,		March 30,
		2012		2012
(in thousands)
Accounts receivable, net		$	63,829	$	68,158
Inventories			64,877		66,388
Prepaid and other current assets			6,621		7,068
Property and equipment, net			22,234		20,885
Goodwill			80,514		92,295
Intangibles, net			12,946		21,054
Other noncurrent assets			1,399		1,530
	Assets held for sale	$	252,420	$	277,378
Accounts payable		$	26,569	$	27,814
Accrued expenses			9,540		4,317
Other current liabilities			3,343		4,026
Other noncurrent liabilities			1,064		1,483
	Liabilities held for sale	$	40,516	$	37,640

The following table summarizes the net sales and total income from discontinued operations for the three and nine months ended December 28, 2012 and December 30, 2011:

		For the Three Months Ended				For the Nine Months Ended
		December 28,		December 30,		December 28,		December 30,
		2012		2011		2012		2011
(in thousands)
Net sales		$	121,908	$	133,492	$	386,689	$	396,729
Income from discontinued operations before
	provision for income taxes(a)		45,527		6,768		52,730		19,491
Provision for income taxes			17,414		2,461		20,326		7,416
Income from discontinued operations, net of
	taxes	$	28,113	$	4,307	$	32,404	$	12,075

• For the three and nine months ended December 28, 2012, amount includes a gain on sale of $41,745.

During the nine months ended December 28, 2012, the Company incurred $7,306of costs associated with the strategic restructuring plan, including retention bonuses for employees and accounting, legal, and other professional fees.

Plan of Merger

On October 24, 2012, the Company entered into the Merger Agreement with McKesson Corporation, a Delaware corporation (“Parent”) and Palm Merger Sub, Inc., a Florida corporation and a direct wholly owned Subsidiary of Parent (together with Parent, the “Acquiring Parties”) under which the Acquiring Parties will acquire all of the Company's outstanding shares for $29.00 per share in cash. The transaction, which has been approved by the boards of directors of both companies, is subject to customary closing conditions, including the approval of the Company's shareholders.

During the nine months ended December 28, 2012, the Company incurred $4,726 of costs associated with the planned merger, including retention bonuses for employees and accounting, legal, and other professional fees.

Debt Agreements

If a change in control of the Company occurs, each holder of the 2012 Notes will have the right to require the Company to repurchase all or part of their outstanding notes for cash at 101% of the aggregate principal amount of the securities repurchased plus accrued and unpaid interest.On January 25, 2013, the Company provided a conditional notice to the holders of the 2012 Notes that the Company has elected to redeem all of the 2012 Notes outstanding on February 25, 2013 (the “Redemption Date”). On the Redemption Date, the 2012 Notes will be redeemed at a redemption price equal to 100% of the principal amount plus a redemption premium and accrued and unpaid interest. The redemption is contingent upon the completion of the merger with McKesson.

Additionally, upon the occurrence of a change in control, each holder of the 2008 Notes will have the opportunity to exchange all or part of their outstanding notes for cash at a price determined under the related indenture. On February 1, 2013, the Company provided notice to the holders of the 2008 Notes that the planned merger with McKesson would constitute a fundamental change as defined by the related indenture, and that on or around the date of the planned merger, the holders of common stock of the Company shall be entitled to receive consideration for each share of common stock owned. This entitlement is contingent upon the completion of the merger with McKesson.

Incentive Compensation

Additionally, upon the occurrence of a change in control (i) all outstanding employee options shall become fully exercisable, (ii) time-based vesting restrictions on all outstanding restricted stock awards shall lapse, and (iii) the target payout opportunities attainable under all outstanding performance-based equity and cash-based awards shall be deemed to have been fully earned as of the date of the change in control based upon an assumed achievement of all relevant performance goals at the target level.