McKesson to Acquire A.L.I. Technologies for US$340 Million in Cash.

Business Editors

SAN FRANCISCO--(BW HealthWire)--May 2, 2002

Addition of PACS and Medical Image Management to Horizon Clinicals

Offering Creates Most Comprehensive Clinical Solution

McKesson Corporation (NYSE:MCK) today announced that it has signed a definitive agreement to acquire A.L.I. Technologies Inc. (TSE:ALT), of Vancouver, British Columbia, by means of a cash tender offer for CN$43.50 per share or approximately CN$530 million (approximately US$340 million). A.L.I. provides market-leading enterprise medical imaging solutions, including PACS (picture archiving and communications systems), which are designed to streamline access to diagnostic information, automate clinical workflow and eliminate the need for film. The acquisition is expected to close within 90 days and is subject to regulatory approval and other customary conditions. It is expected to be accretive to McKesson earnings per share in fiscal 2003.

A.L.I. reported sales of CN$56 million for the 12 months ended March 31, 2002, with revenue growth in its most-recent quarter of 108% compared to a year ago. Net income in the quarter increased 450% versus the prior year. The company has more than 500 ultrasound and PACS system installations at some of the most prestigious healthcare organizations in the United States and Canada -- among them CHRISTUS Health, Cedars-Sinai Medical Center, Johns Hopkins University Hospital, St. Luke's Episcopal Hospital and Kaiser Permanente.

With the acquisition of A.L.I., McKesson will expand its Horizon Clinicals offering to include data, documents, voice and medical images, making it the most comprehensive clinical offering in the market. Horizon Clinicals is McKesson's next generation, integrated suite of solutions for physicians and other clinicians in multiple care settings.

"The addition of medical imaging solutions to our Horizon Clinicals offering will accelerate our market momentum," said John H. Hammergren, McKesson president and chief executive officer. "Today, more than 40% of all medical exams use digital technology such as Computed Tomography (CT) and Magnetic Resonance Imaging (MRI) applications, and that percentage is increasing rapidly as digital X-Ray technology is being deployed. New medical device technology in these digital applications is also creating a rapid increase in the number of images being created per exam. Electronic image networks and sophisticated imaging workstations are increasingly viewed as a necessity to properly interpret these complex cases. Recent surveys indicate that nearly half of our near-term clinical prospects are actively looking for a new medical image management solution.

"Given A.L.I.'s recognized leadership for proven solutions, we see an immediate opportunity to bring this new offering to our large installed base. As a result, we see a significant opportunity to grow our share of the imaging market that is predicted by industry analysts to reach US$1 billion annually by 2005."

According to Graham King, president of McKesson Information Solutions, the acquisition of A.L.I. provides McKesson's clinical customers with the leading medical image management solution and the most complete patient record. "We are committed to providing clinicians with 'anytime, anywhere' access to comprehensive patient information," said King. "This acquisition allows us to automate the diagnostic workflow and expand our offering to the specialists that are so essential to consistent, high-quality care delivery."

King said that McKesson will deploy A.L.I.'s medical image management solutions in conjunction with McKesson's Horizon(WP) Physician Portal to provide clinicians with integrated access to the complete patient record. Both solutions have track records of rapid adoption with minimal training required.

"By joining forces with the leading provider of clinical information systems, we see a tremendous opportunity to extend our reach and take advantage of the large market that exists for next-generation enterprise image management solutions," said Greg Peet, A.L.I. president and chief executive officer. "At the same time, A.L.I. opens the door for new opportunities to introduce organizations to the industry's most recognized brand -- McKesson's Horizon Clinicals. With these solutions, organizations can quickly achieve the return on investment needed to fund large-scale clinical projects to improve patient care."

Known for open, scalable architecture and adherence to industry standards, A.L.I. solutions accommodate the enterprise medical image management needs of both large and small healthcare organizations. These next-generation solutions address the complex needs of today's healthcare enterprises, accommodating virtually all modalities and addressing the specialized workflow requirements of various clinician specialties, including radiologists, obstetricians, perinatologists, oncologists and orthopedists.

Peet and all other personnel associated with sales, installation, development and support will become part of McKesson's Information Solutions business and will remain based in Vancouver, B.C.

McKesson Corporation is the leading provider of supply, information and care management products and services designed to reduce costs and improve quality across healthcare. McKesson solutions empower healthcare professionals with the tools they need to deliver care more effectively and efficiently. Founded in 1833, with annual revenues of more than US$50 billion, McKesson ranks as the 31st largest industrial company in the United States. For more information, call 800/981-8601 or visit our Web site at http://www.mckesson.com. For more information on A.L.I. Technologies, visit its Web site at http://www.alitech.com.

Except for the historical information contained herein, the matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from those projected. These statements may be identified by their use of forward-looking terminology such as "believes," "expects," "anticipates," "may," "will," "should," "seeks," "approximates," "intends," "plans," "estimates" or the negative of these words or other comparable terminology. The most significant of these risks and uncertainties are described in the company's Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission and include, but are not limited to: the resolution or outcome of pending litigation and government investigations relating to the company's previously announced financial restatement ("Restatement"); the effect of the events relating to, or arising out of, the Restatement on the company's ability to attract and retain employees and management; the changing U.S. healthcare environment, including potential changes in private and governmental reimbursement for healthcare products and services, the method by which such products and services are delivered, legislation or regulations governing such products and services, or mandated benefits or changes in manufacturer's pricing or distribution policies; substantial defaults in payment or a material reduction in purchases by large customers; the ability of McKesson Information Solutions to retain existing customers and to attract new customers in light of rapid technological advances, challenges in integrating the company's software products, or the slowing or deferral of demand for such products resulting from the impact of current or pending government regulations; the timing and amounts of the ongoing customer settlement process; and the company's ability to successfully integrate and operate acquired businesses, and manage the risks associated with such businesses, including the acquisition of the business formerly known as HBO & Co. The company assumes no obligation to update information contained in this release.