Healthcare distribution giant McKesson announced Monday it has reached an agreement to sell a partial ownership stake in its medical-surgical division to Apollo Funds for $1.25 billion as the company moves forward with plans to take the unit public.
The investment firm will purchase approximately 13% of the surgical supplies business through a convertible preferred equity deal, according to McKesson. This transaction puts the overall value of the medical-surgical division at around $13 billion, while McKesson maintains majority control of the operation.
McKesson previously announced plans in 2023 to separate its medical-surgical solutions division, which provides surgical tools and related services, into a standalone company. This strategic move allows the pharmaceutical distributor to concentrate on its primary drug distribution operations.
“Apollo’s experience in supporting complex carve-out and public market transactions will be additive as we position MMS for success,” McKesson CEO Brian Tyler stated regarding the partnership.
