McKesson Sells 13% Stake for $1.8 Billion, Signaling Progress Toward Medical Device Unit IPO

U.S. health care services company McKesson is accelerating preparations to spin off its medical and surgical solutions business by selling a minority stake to a private equity firm ahead of the unit’s initial public offering next year.

Foreign media outlets, including Fierce Biotech, reported on the 20th, citing a McKesson press release, that the company sold Apollo funds an approximately 13% minority stake in its medical and surgical solutions (MMS) business for $1.25 billion (approximately 1.8 trillion won). The transaction valued the MMS business at approximately $13 billion (approximately 18.72 trillion won).

McKesson will retain operational control and majority ownership of the MMS business following the stake sale and will continue to consolidate its results for financial reporting purposes. Closing of the transaction is subject to regulatory approval and customary closing conditions.

McKesson CEO Brian Tyler said, “This transaction is a key milestone in McKesson’s planned separation of MMS. Apollo’s experience supporting complex business separations and public-market transactions will help position MMS for success as it moves forward.”

McKesson previously announced in May last year that it planned to spin off the MMS business through an IPO. At the time, the company said the business accounted for only 3.2% of total company revenue.

The MMS business has experienced slowing growth since 2020 because of changes in demand, lower volumes, supply chain disruptions and the postpandemic environment.

Apollo funds partners Maxwell David and Managing Director Jeff Armstrong said, “The MMS business is well positioned for continued growth, and Apollo’s platform can provide flexible, scalable capital to support MMS through the next phase of preparing to operate as an independent company.”