McKesson Corporation announced it has entered into a definitive agreement with funds managed by affiliates of Apollo, under which Apollo Funds will acquire a minority ownership interest in McKesson’s Medical-Surgical Solutions business. The deal marks a key step in McKesson’s broader strategy to separate the unit ahead of a planned initial public offering.
Apollo Funds will invest $1.25 billion in convertible preferred equity in exchange for approximately a 13% minority stake in Medical-Surgical Solutions. The transaction implies a total enterprise valuation of about $13 billion for the business. McKesson will retain majority ownership and operational control, and will continue consolidating the unit’s financial results. The transaction remains subject to regulatory approvals and customary closing conditions.
The investment is positioned as a strategic milestone in McKesson’s efforts to spin off Medical-Surgical Solutions into a standalone company, while strengthening its capital structure and maintaining flexibility during the transition. The company emphasized that Apollo’s experience in complex carve-outs and public market transactions will support the separation process and future growth of the business.
Apollo highlighted Medical-Surgical Solutions as a strong platform within healthcare supply chains, particularly across non-acute care settings, and expressed confidence in its growth trajectory as it prepares for independence.
McKesson noted that forward-looking statements related to the transaction, including the planned IPO and expected benefits, are subject to risks and uncertainties. These include regulatory conditions, market dynamics, and broader economic factors that could impact the timing or completion of the investment and separation.
KEY QUOTES;
“This transaction marks a key milestone in McKesson’s planned separation of MMS. We are pleased to welcome Apollo as an important strategic and financial partner. Apollo’s experience in supporting complex carve-out and public market transactions will be additive as we position MMS for success, while maintaining McKesson’s financial and strategic flexibility. We look forward to working together to execute the separation in a manner that maximizes shareholder value, and establishing a well-capitalized, world-class medical surgical supply and solutions company.”
Brian Tyler, Chief Executive Officer, McKesson Corporation
“MMS is a leading healthcare platform with a talented team and strong market position, playing a key role in healthcare supply chain resiliency across non-acute care settings. We believe the business is well positioned for continued growth, and that Apollo’s Hybrid platform enables us to provide flexible, scaled capital to support the next phase of development as MMS prepares to operate as a standalone company.”
Maxwell David, Partner, Apollo; Jeff Armstrong, Managing Director, Apollo
