CD&R Locks $3.1B Senior Debt for Option Care Health Takeout from McKesson

Clayton, Dubilier & Rice closed a $3.1 billion senior debt syndicate to finance its acquisition of Option Care Health from McKesson Corp., with Bank of America, JPMorgan, Wells Fargo, Barclays, RBC Capital Markets, and Truist Securities named lead arrangers. The financing package underwrites CD&R's purchase of the nation's largest independent home and alternate-site infusion services provider, a $7.8 billion equity-value transaction announced in September. The syndicate is pricing the facility now for a close expected in the first quarter of 2025, subject to regulatory clearance from the Federal Trade Commission.

Option Care Health operates 110 infusion centers and serves more than 100,000 patients annually across immunoglobulin, anti-infective, nutrition support, and specialty pharmaceutical therapies. McKesson acquired the platform through its $4.3 billion purchase of BioPlus Specialty Pharmacy Services in 2014 and subsequent merger with Option Care in 2019. The business generates approximately $4.2 billion in annual revenue with EBITDA margins in the mid-teens, positioning it as a rare scale asset in fragmented alternate-site care. CD&R is paying roughly 14x trailing EBITDA, a premium justified by the platform's payor relationships and the structural tailwind of hospital-to-home migration in high-acuity therapies.

The financing is notable for its timing. Global private equity transaction value fell 65% year-over-year in October, with healthcare carve-outs representing one of the few categories where debt capital remains available at scale. The $3.1 billion senior facility is expected to carry a leverage multiple near 5.5x, in line with recent sponsor-backed healthcare services transactions but above the 4.8x median for non-healthcare LBOs closed in 2024. The six-bank group is underwriting the entire commitment with no immediate syndication planned, a structure that limits execution risk but signals cautious appetite among regional banks and credit funds. CD&R is contributing approximately $2.4 billion in equity from Fund XII, which closed at $26 billion in 2023 and has deployed roughly 18% of commitments to date.

Allocators should track three developments. First, the FTC's review timeline for the transaction, given the agency's heightened scrutiny of vertical integrations in specialty pharmaceuticals and distribution. McKesson is retaining its pharmaceutical distribution and oncology networks, but Option Care's payor contracts and specialty drug access create potential overlap concerns. Second, the syndicate's go-to-market strategy for the senior debt, expected in December or January. If the facility syndicates cleanly at par or better, it establishes a pricing benchmark for $5 billion-plus healthcare LBOs in a market that has seen limited comparable issuance since mid-2023. Third, CD&R's acceleration or deceleration of Fund XII deployment. The firm has closed two transactions above $2 billion equity checks in the past six months, a pace that would exhaust available capital by late 2026 if sustained.

McKesson receives net proceeds of approximately $7.8 billion and will record a pre-tax gain of roughly $3.1 billion on the sale, cash it has earmarked for share repurchases and debt reduction. The company's remaining pharmaceutical distribution and technology segments generate $308 billion in annual revenue, making Option Care's $4.2 billion contribution negligible to consolidated operations but material to McKesson's specialty and oncology narrative. CD&R now controls the largest pure-play alternate-site infusion platform in North America, entering an environment where hospital systems are offloading $14 billion annually in complex therapies to lower-cost settings.