Option Care Health Agrees To $32.05-A-Share Cash Buyout By CD&R And McKesson
The deal values the home-infusion company at about $5.8 billion, with a $145,963,976 fee if Option Care Health walks away in specified cases.
Option Care Health agreed to be bought by an investor group of Clayton, Dubilier & Rice and McKesson for $32.05 per share in cash, according to an 8-K covering a merger agreement signed October 5. The price implies an enterprise value of about $5.8 billion and a premium of about 37% to Monday's close, the company said.
What the 8-K says
Option Care Health signed the deal with Onyx Bidco LLC and its merger subsidiary, vehicles for the CD&R and McKesson group. The company would survive the merger as a wholly owned subsidiary of Onyx Bidco and leave the Nasdaq. The topline of the announcement says current management stays.
CD&R would hold a majority interest of about 51%. McKesson would invest roughly $1.4 billion for about 49%, with a framework for McKesson to later buy CD&R's stake, subject to conditions and regulatory approvals.
The board unanimously recommended that stockholders adopt the agreement. Lenders have committed $3.15 billion of debt, plus up to $500.0 million in revolving credit, to fund part of the transaction.
The merger agreement carries a $145,963,976 termination fee payable by Option Care Health in specified cases and a $291,927,951 fee payable by the buyers. The buyers' financing is not a closing condition.
What it changes for holders
Each share converts into $32.05 in cash, without interest. Holders who do not vote for the deal and properly exercise appraisal rights under Delaware law instead get a court-determined fair value for their shares.
Options, whether vested or not, convert into the cash difference between the deal price and the exercise price; options priced at or above $32.05 are cancelled for nothing. Vested restricted stock units pay out in cash. Unvested ones become a contingent cash award that keeps the original vesting terms. Performance units vest on actual performance for finished periods and at target for the rest.
The company is barred from soliciting rival bids. Before the stockholder vote, it may still talk to an unsolicited bidder if the board decides in good faith that the offer is, or could lead to, a superior proposal.
Option Care Health shares were up 20.50% to $28.16 in Tuesday pre-market trading, against Monday's $23.37 close, before Nasdaq halted trading at 7:55 a.m. ET with news pending. Yahoo Finance reported the stock had fallen 27% this year before it jumped in after-hours trading Monday on a Financial Times report of advanced talks. That report described the same 51%-49% split.
What to watch
Closing is expected in the first half of 2027. It needs a majority vote of outstanding shares, expiration of the Hart-Scott-Rodino antitrust waiting period, healthcare regulatory clearances including certain state approvals, and no court order blocking the deal.
Option Care Health will file a preliminary proxy statement ahead of the vote. It plans to report third-quarter results on November 4 without a live call.
The next filing to look for is the preliminary proxy statement, followed by third-quarter results on November 4.
