Option Care agrees to $5.8 billion buyout by CD&R and McKesson at $32.05 a share

Option Care Health has agreed to be taken private by Clayton Dubilier & Rice and McKesson for $32.05 a share in cash, the companies said on Tuesday, turning a reported negotiation into a signed deal that values the home-infusion company at about $5.8 billion including debt.

The price is about 37% above Option Care's $23.37 close on Monday, the last full trading session before the announcement. It came a day after the Financial Times reported that the two buyers were in advanced talks. Option Care's board voted unanimously for the merger agreement, which was signed on Monday and filed with the Securities and Exchange Commission on Tuesday morning.

Option Care shares were at $31.05 at 10:28 a.m. ET, up 32.9% on the day, according to cnbc.com market data. That leaves them $1 below the cash price, a gap of about 3% that reflects the wait until the expected closing in the first half of 2027 and the risk that the deal falls through. The offer is still below the stock's 52-week high of $36.80, set in January.

How the two buyers split it

CD&R, a private equity firm, will own about 51% of Option Care after the deal, and McKesson will invest about $1.4 billion for roughly 49%. The agreement also sets out a framework for McKesson to buy CD&R's stake later, subject to conditions and regulatory approvals that the companies did not detail. Option Care will remain a separate company run by its current management.

McKesson plans to account for its stake under the equity method, recording its share of Option Care's profit or loss in other income rather than adding the business's revenue to its own. McKesson shares were up 0.8% at $922.54.

"This investment represents an important opportunity that aligns with McKesson’s long-term strategy to expand access and affordability to innovative therapies across the care continuum," Brian Tyler, McKesson's chair and chief executive, said in the joint release.

How the buyout is funded

The filing shows that CD&R's Fund XII and McKesson have committed about $2.87 billion of equity between them. Lenders have committed up to $3.15 billion of debt, which can also be used to repay Option Care's existing borrowings, plus a $500 million revolving credit line. The release names Bank of America, Barclays, Goldman Sachs, Jefferies and Wells Fargo as the banks advising the buyers and providing that committed financing. The buyers' obligation to close does not depend on raising the money.

By TickerGrove's arithmetic, the $5.8 billion enterprise value is about 12 times the midpoint of the $480 million to $495 million of adjusted EBITDA, a measure of earnings before interest, taxes, depreciation and amortization, that Option Care had forecast for 2026. The company withdrew that forecast on Tuesday. It will still report third-quarter results on Nov. 4 but will not hold a conference call.

What still has to happen

The deal needs the approval of holders of a majority of Option Care's outstanding shares, clearance under U.S. antitrust law and a set of state healthcare regulatory approvals. Either side can walk away if it has not closed by Oct. 5, 2027.

Option Care has agreed not to shop itself to other bidders, but before shareholders vote its board can still consider an unsolicited offer it judges superior, subject to the buyers' right to match. If Option Care leaves for a rival bid, it owes a termination fee of about $146 million. The buyers would owe Option Care about $292 million if they breach the agreement or fail to close when required.

"The Board of Directors completed an extensive assessment, involving thorough discussions with our advisors, and unanimously concluded this transaction maximizes value for our stockholders," Harry Kraemer, Option Care's chairman, said.

Why home infusion is the prize

Option Care, which calls itself the largest independent U.S. provider of home and alternate-site infusion services, gives patients intravenous drugs at home or in outpatient clinics instead of in hospitals. It has more than 8,000 employees, including more than 5,000 clinicians, in all 50 states. Its growth has been slow: second-quarter revenue rose 1.9% to $1.44 billion.

The buyers are betting that specialty, rare-disease and other complex therapies will keep moving into those lower-cost settings. McKesson said it is focused on investing where care can be delivered in community settings, "at or closer to home." The stake extends its push into specialty care: in August it agreed to buy Precision Medicine Group, a clinical research and drug-commercialization services company, for about $2.25 billion.