CD&R and McKesson to take home-infusion giant Option Care Health private in $5.8 billion deal

Option Care Health, the largest independent provider of home infusion therapy in the United States, agreed on Tuesday to be taken private in a deal valuing the company at roughly $5.8 billion, as private equity firm Clayton, Dubilier & Rice and drug distributor McKesson Corporation moved jointly to control a fast-growing corner of the home health care market.

Under the terms disclosed in a filing with the Securities and Exchange Commission, CD&R and McKesson will pay $32.05 a share in cash for Option Care Health, a roughly 37% premium over the stock's October 5 closing price. CD&R will hold a majority stake of about 51% once the deal closes, with McKesson investing approximately $1.4 billion for a minority stake of roughly 49%. Option Care Health, which is based in Bannockburn, Illinois, and trades on the Nasdaq exchange, will be delisted and become a privately held company once the transaction closes, which both companies expect in the first half of 2027.

The numbers

The all-cash transaction is backed by committed financing from five banks, Bank of America, Barclays, Goldman Sachs, Jefferies and Wells Fargo, according to CD&R's own announcement of the agreement. Option Care Health currently employs more than 8,000 people, including more than 5,000 clinicians, across all 50 states, and the companies said the existing workforce and management team will remain in place after the deal closes. The agreement requires approval from Option Care Health's stockholders as well as customary antitrust and regulatory clearances. In a separate disclosure, the company said it was withdrawing its prior financial guidance and would report third-quarter results on November 4 without holding a conference call, a typical step for a company that has agreed to be acquired.

How we got here

The deal lands at a moment of heavy consolidation in home-based infusion therapy, where patients receive intravenous drugs, including biologics and immunoglobulin treatments, at home rather than in a hospital or clinic. Private equity firms completed a wave of smaller infusion and specialty-pharmacy acquisitions throughout the spring and summer, drawn by what investment bankers have described as a recurring revenue stream from chronic-disease patients in a fragmented, regionally scattered market ripe for roll-ups, even as economists have warned that the resulting consolidation could eventually push prices higher and reduce competition. Option Care Health, formed from the 2019 merger of BioScrip and the former Option Care, had built itself into the largest scaled player in that market, operating more than 170 infusion suites alongside its home-based service lines. McKesson, already one of the country's largest pharmaceutical distributors and a major supplier of specialty drugs used in infusion therapy, has spent recent years expanding deeper into the delivery side of specialty pharmaceutical care rather than remaining purely a distributor, a strategy reflected in a parallel disclosure McKesson filed with securities regulators describing the deal's rationale.

Who is affected

Option Care Health's shareholders are the most immediate beneficiaries, locking in a premium of more than a third over Monday's closing price in an all-cash deal rather than continuing to hold shares in a public company facing a choppy reimbursement and competitive environment. Patients who rely on home infusion services are unlikely to see immediate changes, since both acquirers emphasized that the company will keep operating under its existing brand, leadership and clinical staff. Rival infusion and specialty pharmacy providers, as well as hospital systems that compete for the same patient referrals, will be watching how a combination of private equity capital and McKesson's drug-distribution scale changes competitive dynamics in a market insurers have been pushing toward lower-cost, home-based care. McKesson shareholders, meanwhile, are being asked to underwrite a $1.4 billion minority investment in a business adjacent to, but distinct from, the company's core wholesale distribution operations.

Reaction

Executives from both the buyers and the target framed the deal as a vote of confidence in the shift toward home-based specialty care rather than a defensive consolidation move.

"Option Care Health has shown what is possible when high-quality infusion therapy is delivered where patients are most comfortable: at home and in their communities," said Sarah Kim, a partner at CD&R.

Option Care Health's chairman, Harry Kraemer, said the company's board "unanimously concluded this transaction maximizes value for our stockholders," while chief executive John C. Rademacher said the company was "thrilled to have the support of CD&R and McKesson, empowering us to continue investing strategically." McKesson chairman and chief executive Brian Tyler cast the investment as consistent with the distributor's broader strategy to expand access to specialty and biologic therapies.

What happens next

Option Care Health's stockholders must still vote to approve the merger, a process that, combined with the antitrust and other regulatory reviews required before closing, is expected to stretch into the first half of 2027. Because McKesson is both a major supplier to the broader infusion and specialty pharmacy industry and will now hold a direct equity stake in one of the largest companies in that industry, the deal is likely to draw scrutiny from antitrust regulators concerned about vertical integration between drug distribution and care delivery, an issue that has shadowed similar deals involving large pharmacy benefit managers and distributors in recent years. If the transaction closes as planned, Option Care Health will operate as a private company for the first time since 2019, freeing it from quarterly earnings pressure as it pursues the kind of acquisitions and infusion-suite expansion that are harder to execute as a publicly traded company facing short-term investor scrutiny.