Apollo Global Management’s investment vehicle, Apollo Funds, has entered into a definitive agreement to acquire a 13% equity stake in McKesson Corporation’s Medical‑Surgical Solutions (MMS) unit for $1.25 billion in convertible preferred equity. The transaction values MMS at roughly $13 billion and provides McKesson with additional capital to support its planned separation of the unit into a standalone company.
McKesson has been working toward a spin‑off of MMS since May 2025, with transition service agreements in place as of January 1, 2026. The partnership with Apollo is intended to accelerate that process, allowing McKesson to focus on its core pharmaceutical distribution business while positioning MMS for a future initial public offering.
MMS reported $3 billion in revenue for the third quarter of fiscal 2026, a 1% increase from the same period a year earlier, while operating profit fell 10% due to lower volumes in physician office settings and a lighter illness season. The modest revenue growth reflects steady demand for medical‑surgical supplies in non‑acute care settings, but the profit decline highlights the impact of volume headwinds on the segment’s margin profile.
Apollo’s hybrid platform, which blends equity and debt financing, is expected to provide MMS with flexible, scaled capital that can be deployed as the company moves toward independence. Apollo’s experience in supporting complex carve‑outs and public market transactions is viewed as an asset that can help MMS navigate the regulatory and operational challenges of becoming a standalone entity.
Brian Tyler, McKesson’s CEO, said, "This transaction marks a key milestone in McKesson's planned separation of MMS. We are pleased to welcome Apollo as an important strategic and financial partner. Apollo's experience in supporting complex carve‑out and public market transactions will be additive as we position MMS for success, while maintaining McKesson's 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." Apollo partner Maxwell David added, "MMS 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. We believe the business is well positioned for continued growth, and that Apollo's 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."
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