AMFAC IS NORTHWESTERN's NEWEST FOSTER PARENT: ACQUISITION WILL PUSH AMFAC

AMFAC IS NORTHWESTERN's NEWEST FOSTER PARENT: ACQUISITION WILL PUSH AMFAC sales above $ 1 bil. in the upcoming fiscal year beginning July 1. Amfac, under its recent buyout name MWC, Inc. of Folsom, Calif., purchased Northwestern Drug for undisclosed cash. Amfac's gross revenues for the year ending June 30 will be approximately $ 900 mil. Northwestern's revenues are "between $ 150 mil. and $ 200 mil.," Amfac said. Projected combined annual revenues will be approximately $ 1.2 bil. Under the new ownership, Northwestern President and CEO Roger Omholt will work out of MWC's corporate headquarters and Exec VP Alan Haggland will serve as general manager, controlling day-to-day operations. Amfac Health Care and Northwestern Drug will be run as two distinct businesses. Commenting on the addition of Northwestern, MWC President and CEO Mel Whitmire said: "The acquisition will expand our ability to service the independent retail pharmacy. Northwestern has an excellent reputation with the full line independent retailers and enhances our ability to service this segment of the market." MWC's penetration to date in the Pacific Northwest has been mainly in the area of hospital supply. The company won a five-year exclusive pharmaceutical contract with a Seattle-based hospital supply group last year that is worth about $ 55 mil. annually. MWC operates Amfac Health Care branches in Spokane and Tukwila, Washington and Portland, Oregon. The company operates 27 other distribution centers for prescription and selected OTCs and services over 9,000 customers in 38 states, including independent and chain drug stores and hospital pharmacies. MWC is a management-owned firm formed in a $ 120 mil. leveraged buyout completed Aug. 1. Northwestern Drug has changed ownership several times during this decade. The wholesaler was acquired by Pay 'n Save early in the decade, igniting a debate within the industry about the ownership of a wholesaler by a retailer. Pay n' Save was subsequently purchased by the Trump Group in the autumn of 1984 and then Thrifty Drug in May 1988. Thrifty tried to sell Northwestern to McKesson last year. However, the Federal Trade Commission nixed the agreement for anticompetitive reasons, citing the possibility of McKesson's regional marketing dominance in the Pacific Northwest ("The Pink Sheet" Oct. 10, p. 3). Whitmire said the company did not anticipate any problems with the Amfac purchase because there is no significant pharmaceutical business overlap for the two firms in Washington and Oregon. The FTC has not raised objections to the acquisition. Northwestern Drug operates one 285,000-square foot distribution facility providing prescription and OTC drugs and H&BAs primarily to Washington and Oregon independent retail drug stores. The firm has 200 employees.