Fenwick & West Represents McKesson Information Systems in Landmark, $480 million Licensing Transaction

December 05, 2001

Deal Announced: December 5, 2001
Web Posted: December 7, 2001

Fenwick & West has represented McKesson Information Solutions, a wholly-owned subsidiary of Atlanta-based McKesson Corporation, the world's largest marketer of business software solutions in the health care industry, in their negotiations with the United Kingdom's National Health Service. McKesson Information Systems, which already had a 75% share of the primarily government run UK health care market entered into negotiations to provide the HR and payroll system for the 1.2 million employees of the National Health Service as a result of the Blair government's "Private Financing Initiative" to privatize a number of government functions. The HR and payroll system provided by McKesson Information Solutions will be one of the first of these Private Financing Initiatives and is expected to be announced by the Blair government within days.

The 10-year, $480 million contract has the effect of making McKesson Information Solutions an ASP to the National Health Service, providing a database capable of handling up to 20,400 simultaneous users built on new IBM servers and the soon to be released Oracle 9i Database. The deal is believed to be the largest ASP deal ever and the largest software licensing deal ever for commercially available software and hardware.

The Fenwick team included partners Tim Covington, based in San Francisco, and Brian Kelly, based in Washington, D.C., with assistance from associates Dana Hayter and Aram Hermiz. McKesson Information Systems was represented locally in the UK by Sheffield-based Wake-Smith. Fenwick and Wake-Smith guided McKesson through several months of complex negotiations with the government and with the several sub-contractors involved in the transaction, many of whom were themselves entering into their largest sales ever.

About Fenwick & West

Established in 1972, Fenwick & West LLP is one of the nation's premier law firms providing comprehensive legal services to national and international technology clients, particularly in the areas of intellectual property, the Internet, venture capital and other corporate finance, joint ventures, M&A and strategic relationships, litigation and dispute resolution, antitrust, taxation, and employment and labor law. The only law firm named to Fortune's 1999-2001 lists of the "100 Best Companies to Work For," Fenwick & West has offices in Palo Alto and San Francisco, CA as well as Washington, D.C. Fenwick & West's Website URL is

McKesson press release:

Press inquiries regarding this transaction should be directed to Tim Covington in our San Francisco office at 415.875.2333.