IRVING, Texas 鈥� McKesson Corp. has entered into a definitive agreement with funds managed by affiliates of Apollo (鈥淎pollo Funds鈥�), under which Apollo Funds will acquire a minority ownership interest in McKesson鈥檚 Medical-Surgical Solutions (鈥淢MS鈥�) business. This transaction represents a meaningful milestone as McKesson executes its separation strategy of MMS in preparation of a planned initial public offering.
Apollo Funds will invest $1.25 billion in convertible preferred equity of MMS to acquire an approximately 13% minority interest in MMS. The transaction values MMS at approximately $13 billion total enterprise valuation. McKesson will retain operating control and majority ownership of MMS and consolidate the results for financial reporting. The transaction is subject to regulatory approvals and customary closing conditions.
鈥淭his transaction marks a key milestone in McKesson鈥檚 planned separation of MMS,鈥� said Brian Tyler, chief executive officer of McKesson. 鈥淲e are pleased to welcome Apollo as an important strategic and financial partner. Apollo鈥檚 experience in supporting complex carve-out and public market transactions will be additive as we position MMS for success, while maintaining McKesson鈥檚 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.鈥�
鈥淢MS 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,鈥� said Apollo Partner Maxwell David and managing director Jeff Armstrong. 鈥淲e believe the business is well positioned for continued growth, and that Apollo鈥檚 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.鈥�
