Apollo takes McKesson stake
- McKesson agreed to sell a strategic minority interest in its Medical‑Surgical Solutions business to Apollo funds. - Apollo is acquiring roughly a 13% stake in the unit under the agreement announced April 19. - The structure shows sponsors favoring minority, cash‑flow‑stable investments when full buyouts face financing constraints ( ).
McKesson has agreed to sell Apollo funds a minority stake in its medical-surgical supplies business for $1.25 billion. (mckesson.com) The deal, announced April 20, gives Apollo about 13% of McKesson’s Medical-Surgical Solutions unit through convertible preferred equity and values the business at about $13 billion. McKesson said it will keep majority ownership and control. (businesswire.com) McKesson said the transaction is part of its plan to separate Medical-Surgical Solutions into an independent company through an initial public offering. Reuters reported the Apollo investment comes ahead of that planned listing. (mckesson.com, reuters.com) Medical-Surgical Solutions is the McKesson division that ships gloves, syringes, exam-room supplies and other products to physician offices, surgery centers, nursing homes, labs and home-health providers. In McKesson’s fiscal 2025 annual report, the company described the unit as a distribution and logistics business serving non-acute-care settings. (sec.gov) That business generated $11.4 billion in revenue and $773 million in operating profit in the fiscal year ended March 31, 2025, according to trade publication MDM’s report on McKesson’s latest results. Those numbers help explain why McKesson can raise cash from a partial sale without giving up control before a spinoff. (mdm.com) Apollo is making the investment through its Hybrid platform, which mixes debt-like and equity-like financing for companies that want capital without a full buyout. Apollo said that structure gives it “flexible, scaled capital” as Medical-Surgical Solutions prepares to stand alone. (apollo.com) Private-equity firms have been leaning harder on structures like minority stakes, preferred equity and other tailored financings as traditional buyouts remain harder to fund. Bain said in its 2026 outlook that fundraising stayed weak and liquidity issues persisted even as overall deal value improved. (bain.com) McKesson first said in May 2025 that it intended to separate the medical-surgical unit as it sharpened its focus on pharmaceutical distribution and health-technology businesses. The Apollo deal gives McKesson cash now and a financial partner as it works toward that separation. (last10k.com, mckesson.com) The transaction still needs customary closing conditions and regulatory approvals. If it closes as planned, McKesson will have sold a slice of a steady supply-chain business while keeping control of the company it wants to take public. (businesswire.com)
