Apollo Funds paid $1.25B for a 13% minority stake in McKesson’s Medical/Surgical Solutions division, valuing MMS at roughly $13 billion. McKesson retains operating control and continues consolidating MMS results for financial reporting.
The deal is a pre-IPO setup. McKesson announced last May it would spin off MMS through a public offering. Apollo’s investment now provides outside backing as MMS moves toward independence. At the time of the May announcement, MMS represented just 3.2% of McKesson’s total corporate revenue, a non-core unit positioned for separation.
The medical supply distribution space has attracted major capital. At $13 billion, MMS represents a credible pre-IPO mark for a business with established distribution infrastructure.
What does Apollo actually get? A stake in a division that’s been slow. MMS has dealt with lower volumes, supply chain disruptions, and a post-pandemic demand reset since 2020. Brian Tyler, McKesson’s CEO, cited Apollo’s experience in “complex carve-out and public market transactions” as the rationale.
Apollo partner Maxwell David and managing director Jeff Armstrong cited the firm’s Hybrid platform, calling it a vehicle for flexible, scaled capital as MMS prepares to operate as a standalone company.
The close is subject to regulatory approvals. The IPO is targeted for next year, and whether Apollo’s implied $13 billion holds in a public market is the question McKesson’s bankers are solving for.
— Diana Kowalski