BANNOCKBURN, Ill. and NEW YORK — Option Care Health, Inc. (NASDAQ: OPCH) announced on October 6, 2026, that it entered into a definitive merger agreement to be acquired by an investor group led by private equity firm Clayton, Dubilier & Rice (CD&R) alongside healthcare distributor McKesson Corporation (NYSE: MCK) in an all-cash take-private transaction valued at an enterprise value of approximately $5.8 billion.
Under the terms of the transaction detailed in the company’s Form 8-K Exhibit 99.1 announcement, Option Care Health stockholders will receive $32.05 in cash for each share of common stock owned. According to the companies, the headline offer represents a premium of approximately 37% to Option Care Health’s closing share price on October 5, 2026, the final full trading session prior to the public announcement. Following completion of the buyout, CD&R will hold a majority equity interest, while McKesson will hold a minority stake. Option Care Health will transition from public equity markets to private ownership, operating as a standalone company led by its existing executive leadership team.
Key Transaction Terms and Valuation Metrics
The transaction represents one of the largest private equity-backed healthcare services buyouts of 2026. Option Care Health operates as an independent provider of home and alternate-site infusion therapy services across the United States, managing an extensive network of clinical pharmacies and ambulatory infusion suites.
The acquisition parameters disclose several critical financial structures across valuation, governance, and syndication:
- All-Cash Offer: $32.05 per share in cash per common share, delivering immediate certainty of value to public shareholders.
- Enterprise Valuation: Total enterprise value of approximately $5.8 billion, inclusive of net debt refinancing.
- Offer Premium: Approximately 37% above the unaffected closing price on October 5, 2026.
- Equity Consortium Structure: CD&R Fund XII, L.P. provides primary sponsor equity and majority control, while McKesson provides minority co-investment equity. McKesson confirmed it intends to account for its minority interest using the equity method of accounting upon closing.
- Expected Closing: Anticipated during calendar year 2027, subject to the affirmative vote of Option Care Health stockholders, expiration of waiting periods under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, and required state healthcare regulatory authorizations.
| Transaction Metric | Disclosed Term / Value | Structure / Regulatory Details |
|---|---|---|
| Per-Share Cash Offer | $32.05 | 100% all-cash consideration |
| Total Enterprise Value | ~$5.8 billion | Includes equity value and debt refinancing |
| Unaffected Stock Premium | ~37% | Relative to closing price on October 5, 2026 |
| Committed Term Debt | Up to $3.15 billion | Senior credit facility to fund merger & debt discharge |
| Committed Revolver | Up to $500.0 million | Revolving credit line for liquidity and transaction costs |
| Company Termination Fee | $145,963,976 | Payable upon fiduciary out or superior proposal |
| Parent Reverse Break-Up Fee | $291,927,951 | Payable upon buyer breach or closing failure (severally guaranteed) |
| Expected Closing Timeline | CY 2027 | Subject to shareholder vote and healthcare regulatory review |
Debt Financing Structure and Sponsor Commitments
Unlike debt transactions conditioned upon volatile capital markets syndication, the merger agreement explicitly provides that the closing of the acquisition is not conditioned on Parent’s receipt of financing. As detailed in the Form 8-K filing, the acquisition vehicle secured fully committed financing packages spanning both credit and equity:
First, Merger Sub secured a binding debt commitment letter under which participating institutional lenders have committed, subject to customary conditions, to lend up to $3.15 billion to fund a portion of the transactions contemplated by the merger agreement
(including the retirement and discharge of Option Care Health’s existing indebtedness). In addition, the lending syndicate committed up to $500.0 million in a revolving credit facility. The committed debt package was underwritten by leading capital markets institutions including Bank of America, Barclays Bank PLC, Goldman Sachs & Co. LLC, Jefferies, and Wells Fargo Bank, N.A., who are also acting as financial advisors to the purchasing consortium.
Second, Parent received executed equity commitment letters from Clayton, Dubilier & Rice Fund XII, L.P. and McKesson Corporation. These equity sponsors have committed sufficient capital to cover the remainder of the purchase price and transaction fees, and each guarantor has severally guaranteed payment of the Parent termination fee and associated enforcement obligations up to contractual caps.
Break-Up Provisions and Deal Protections
The merger agreement includes balanced deal-protection mechanisms designed to ensure deal certainty while preserving the fiduciary duties of Option Care Health’s board of directors:
- Company Termination Fee: Option Care Health will be required to pay Parent a break-up fee of $145,963,976 if the board terminates the agreement to pursue a superior acquisition proposal or changes its recommendation. This represents approximately 2.5% of total enterprise value, aligning with standard market thresholds in public healthcare M&A.
- Parent Reverse Break-Up Fee: Parent will be required to pay Option Care Health a reverse termination fee of $291,927,951 — exactly double the company break-up fee — if Parent fails to consummate the closing within two business days of all conditions being satisfied or commits an uncured material breach.
- Expense Caps: Enforcement expenses and reimbursement obligations are capped at $7.5 million for each side. Neither party may seek both specific performance resulting in a completed closing and collection of the applicable termination fee.
For market participants studying private equity capital structures, the financing architecture mirrors institutional practices seen across recent leveraged buyouts and high-yield refinancings. Readers interested in foundational capital markets mechanics can explore our capital markets primer and review recent debt restructurings such as AMC’s debt refinancing and corporate acquisitions funded through Clean Harbors’ senior notes offering.
What Capital Markets Will Watch Next
The transaction now proceeds into shareholder solicitation and antitrust review. Key operational milestones to track include:
- Preliminary Proxy Filing (Schedule 14A): Option Care Health will file a detailed proxy statement with the SEC containing background discussions of the merger, valuation fairness opinions from Centerview Partners, and financial projections.
- Antitrust and Healthcare Clearances: Because McKesson is one of the largest pharmaceutical distributors in the United States and CD&R holds active investments across healthcare services, regulatory authorities will review vertical integration touchpoints under the HSR Act.
- Debt Syndication Timing: Lead arranging banks (Goldman Sachs, Bank of America, Barclays, Jefferies, and Wells Fargo) will launch marketing of the $3.15 billion debt financing package to syndicated loan and high-yield bond investors as the transaction moves toward closing in 2027.
Sources
- SEC Form 8-K: Option Care Health, Inc. Material Definitive Agreement (October 5, 2026)
- SEC Form 8-K Exhibit 99.1: Press Release — CD&R and McKesson Corporation Sign Agreement to Acquire Option Care Health (October 6, 2026)
Disclosure: This article is for informational purposes only and is not investment advice.