McKesson Corporation (MCK) has completed the sale of a minority position in its medical-surgical solutions division to Apollo Funds for $1.25 billion, marking a strategic move ahead of a planned spinoff via initial public offering. This transaction enables McKesson to extract value while concentrating on faster-growing oncology and biopharma services, setting up both companies for independent strategic growth.
Key Takeaways
- Apollo Funds acquires minority stake for $1.25 billion
- Medical-surgical unit generated $11.4 billion revenue in fiscal 2025
- IPO planned for second half of 2027
Strategic Portfolio Optimization
This transaction demonstrates McKesson’s methodical approach to capital allocation, channeling resources toward higher-margin prospects in oncology and biopharma solutions1. The medical-surgical solutions division accounts for just 3.2% of McKesson’s overall revenue but has faced sluggish expansion since 2020 due to post-pandemic stabilization and supply chain challenges2.
McKesson CEO Brian Tyler stated that the separation will “unlock significant value for both McKesson and Medical-Surgical Solutions, enabling each to pursue growth and operational excellence in their respective markets”3. The company has a history of successful asset sales, including the Change Healthcare divestiture in 2020, which generated considerable shareholder returns.
Financial Performance and Market Context
The medical-surgical division posted $11.4 billion in revenue for fiscal year 2025, marking a modest 1% improvement from the previous year1. Operational profit margins have stayed appealing despite volume challenges, especially in physician office environments and seasonal illness patterns4.
McKesson’s overall portfolio demonstrated robust performance, with aggregate revenues reaching $359.1 billion in fiscal 2025, climbing 16.2% year-over-year2. The company’s U.S. Pharmaceutical division, accounting for 91.3% of sales, fueled most of this expansion through enhanced specialty drug distribution, especially in oncology.
IPO Timeline and Market Preparation
The corporation is aiming for an IPO of the medical-surgical division during the second half of calendar year 2027, pending market conditions and regulatory clearances4. Critical transition service agreements reached completion on January 1, representing a significant step toward operational autonomy.
McKesson leadership highlighted their proven capability with sophisticated separations, including recent successful departures from European markets through the Norwegian operations sale to NorgesGruppen4. The company anticipates that the separated entity will gain from focused management attention and customized growth approaches across alternative care markets.
Investment in Growth Areas
Alongside the medical-surgical divestiture, McKesson has bolstered its oncology platform through a $2.49 billion purchase of a 70% interest in CORE Ventures, supporting over 250 physicians across nearly 100 locations in Florida3. This investment reinforces the company’s strategy to focus resources on high-growth specialty sectors.
The company projects fiscal 2026 adjusted earnings per share of $36.75 to $37.55, indicating 11% to 14% growth year-over-year2. Leadership confirmed long-term adjusted EPS growth objectives of 12% to 14% while revising U.S. Pharmaceutical segment operating profit growth projections to 6% to 8%.
Not investment advice. For informational purposes only.
References
1Joe Cornell (May 15, 2025). “McKesson To Spin-Off Its Medical-Surgical Solutions Business”. Forbes. Retrieved April 20, 2026.
2Reuters (May 8, 2025). “McKesson to spin off surgical supplies unit, forecasts strong annual profit”. Reuters. Retrieved April 20, 2026.
3HME News Staff (June 3, 2025). “McKesson to spin off Medical-Surgical Solutions segment, focus on high-growth oncology and biopharma markets”. HME News. Retrieved April 20, 2026.
4Liz Beaulieu (February 13, 2026). “McKesson on track for IPO of Medical-Surgical business”. HME News. Retrieved April 20, 2026.