Business Combinations

9 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Business Combinations

Business Combinations

2019 Acquisition

Medical Specialties Distributors LLC (“MSD”)

On June 1, 2018, the Company completed its acquisition of MSD for the net purchase consideration of $784 million, which was funded from cash on hand. MSD is a leading national distributor of infusion and medical-surgical supplies as well as a provider of biomedical services to alternate site and home health providers. The financial results of MSD have been included in the Company’s condensed consolidated statements of operations within its Medical-Surgical Solutions segment since the acquisition date.

The fair value of assets acquired and liabilities assumed as of the acquisition date were finalized upon completion of the measurement period in the first quarter of 2020. As of June 30, 2019, the final amounts of fair value recognized for the assets acquired and liabilities assumed as of the acquisition date, excluding goodwill and intangibles, were $239 million and $169 million. Approximately $388 million of the final purchase price allocation was assigned to goodwill, which reflects the expected future benefits of certain synergies and intangible assets that do not qualify for separate recognition. The final purchase price allocation included acquired identifiable intangibles of $326 million primarily representing customer relationships with a weighted average life of eighteen years.

2018 Acquisition

CoverMyMeds LLC (“CMM”)

On April 3, 2017, the Company completed its acquisition of CMM for the net purchase consideration of $1.3 billion, which was funded from cash on hand. The fair value of assets acquired and liabilities assumed as of the acquisition date were finalized upon completion of the measurement period in the first quarter of 2019. The financial results of CMM have been included in the Company’s condensed consolidated statements of operations within Other since the acquisition date.

Pursuant to the agreement, the Company paid additional contingent consideration of $69 million and $68 million for each of May 2019 and 2018. As of December 31, 2019 and March 31, 2019, the related liability was nil and $69 million.

2017 Acquisition

Rexall Health

In the third quarter of 2017, the Company completed its acquisition of Rexall Health which operated approximately 400 retail pharmacies in Canada, particularly in Ontario and Western Canada. The net cash purchase consideration of $2.9 billion Canadian dollars (approximately $2.1 billion) was funded from cash on hand. On May 23, 2018, as a result of resolving certain indemnity and other claims related to this acquisition, $125 million Canadian dollars (approximately $97 million) was released to the Company from an escrow account. The receipt of this cash was recorded as a settlement gain within operating expenses in the Company’s condensed consolidated statement of operations in the first quarter of 2019.

Other Acquisitions

During the three and nine months ended December 31, 2019 and 2018, the Company also completed several other de minimis acquisitions within its operating segments. Financial results for the Company’s business acquisitions have been included in its condensed consolidated financial statements since their respective acquisition dates. Purchase prices for business acquisitions have been allocated based on estimated fair values at the date of acquisition.

Goodwill recognized for business acquisitions is generally not expected to be deductible for tax purposes. However, if the assets of another company are acquired, the goodwill may be deductible for tax purposes.