April 20 (Reuters) – McKesson said on Monday it will sell a minority stake in its medical-surgical solutions business to investment firm Apollo Funds for $1.25 billion, as it prepares to spin off the unit through an initial public offering.
Apollo will acquire about 13% of the business through a convertible preferred equity investment, valuing the business at roughly $13 billion, the company said. McKesson will retain control and majority ownership of the unit.
The drug distributor had said last year that it was planning to spin off the unit, which supplies surgical instruments and services, into an independent company to focus on its core drug distribution business.
“Apollo’s experience in supporting complex carve-out and public market transactions will be additive as we position MMS for success,” said McKesson CEO Brian Tyler.
(Reporting by Christy Santhosh and Sahil Pandey in Bengaluru; Editing by Tasim Zahid and Jonathan Ananda)
