Option Care (OPCH) Agrees $5.8B McKesson, CD&R Buyout

McKesson and CD&R will take Option Care Health private at $32.05 a share, a $5.8 billion deal, after the stock jumped 21% on reports of advanced talks.

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What Happened?

A definitive merger agreement was signed on October 6, after Monday's reports that an announcement could come as soon as Tuesday. McKesson declined to comment on those reports, and the parties confirmed the terms the next day.

Option Care's board approved the deal unanimously. After closing, the company will be privately held and delisted from Nasdaq. It will keep operating as a standalone business under CEO John Rademacher and the existing management team.

The company withdrew its previously issued financial guidance and cancelled its third-quarter earnings call. Results had been due November 4.

How Is the Ownership Split Structured?

CD&R will hold about 51% of Option Care and McKesson about 49%. McKesson is investing roughly $1.4 billion. The agreement also gives McKesson a framework to buy CD&R's stake later, subject to specified conditions and regulatory approvals. That path could eventually give the distributor full ownership of the largest independent home infusion provider in the United States.

The structure keeps most of the debt and consolidation burden off McKesson's balance sheet for now. It also leaves the option of a full takeover once the business is integrated and regulators have signed off.

Why Are McKesson and CD&R Buying Option Care?

The buyers are paying for scale in a growing site of care. Option Care delivers intravenous and injectable medications to patients outside hospitals, through a national network of pharmacies and about 5,000 clinicians. It has more than 8,000 employees and serves patients in all 50 states.

For McKesson, the investment extends its reach beyond wholesale distribution and into specialty and patient-facing services. Home infusion has benefited from the push by payers and providers to move treatment out of higher-cost hospital settings, and from an ageing patient population with chronic conditions.

For CD&R, the company offers recurring revenue, a leading market position and a distribution partner already embedded in the drug supply chain. The firm has a long record of backing healthcare services and distribution businesses.

Market Reaction

Option Care closed Monday at about $23.37, which gives it a market value of roughly $3.5 billion. The after-hours jump of about 21% left the shares below the $32.05 offer. The gap reflects the time to closing and the regulatory and shareholder approvals still required. McKesson did not comment on the reports, and no price reaction for its shares was available in the initial announcement.

What Comes Next for the Deal?

The transaction needs approval from Option Care shareholders and clearance from regulators. A closing in the first half of 2027 leaves several months for review. The antitrust questions center on McKesson's role in drug distribution and its stake in a major infusion provider. A financing group of Bank of America, Barclays, Goldman Sachs, Jefferies and Wells Fargo has been lined up for the debt. Centerview Partners advised Option Care.

Further healthcare services deals are likely to follow if this transaction clears. It combines private equity capital with a strategic distributor, in a sector where scale and payer relationships drive margins.

Outlook

The $5.8 billion agreement takes a publicly traded infusion leader private within about nine months, if approvals proceed on schedule. Shareholder and regulatory votes, and the terms on which McKesson may later acquire CD&R's stake, will determine whether this is a long-term partnership or a staged takeover.