McKesson moves MMS closer to IPO

IRVING, Texas – McKesson’s Medical-Surgical Solutions (MMS) segment is now operationally and legally separate, and with new financing and a new minority ownership, it is closer to becoming financially independent, says CFO Britt Vitalone.

In early April, the company announced:

• A $1 billion revolving credit facility and the issuance of $1 billion in Term Loan A facilities.
• The sale of a 13% minority interest to funds managed by Apollo in a deal that values the segment at $13 billion.

“We also expect to issue up to $2.25 billion in additional term loans in the second half of the first quarter of fiscal year 2027,” Vitalone said during a recent conference call to discuss the company’s latest financial results. “The proceeds from all these transactions will be used to satisfy existing intercompany agreements with McKesson. We intend to deploy these funds in line with our disciplined capital allocation strategy, principally toward share repurchases. Together, these transactions will complete the establishment of an independent capital structure for the Medical-Surgical business.”

Financing and agreements support separation readiness

The financing transactions follow the completion of key transition service agreements earlier this year, another milestone in preparing the MMS segment to operate independently.

“This aids in establishing a standalone capital structure for the business, supporting separation readiness and positioning the new company with financial flexibility as an independent company,” said CEO Brian Tyler.

Apollo brings carve-out and IPO experience

Apollo, company execs say, will also help to better position McKesson as it executes the next phase of the separation and prepares for a planned initial public offering (IPO) for the MMS segment.

“Apollo brings deep experience supporting complex carve-outs and public market transactions,” Vitalone said.

Upcoming IPO

Company officials aim to take the MMS segment public in the second half of calendar year 2027. The company has emphasized, however, that the timing of the IPO will, ultimately, depend on market conditions and regulatory approvals.