Option Care Health Buyout Has No Antitrust Breakup Fee

Option Care Health agreed on Monday, October 5, 2026, to be bought by Clayton, Dubilier & Rice and McKesson for $32.05 a share in cash, about $5.8 billion including debt, according to the companies' joint press release. The merger agreement has no regulatory reverse termination fee. If antitrust enforcers block the deal and the buyers have kept their promises, Option Care gets no fee. The $291.9 million fee the buyers would owe covers only a breach or a failure to close, not a regulatory block.

What the $291.9 Million Fee Covers

Section 8.3(c) says Parent pays $291,927,951 only if Option Care terminates "pursuant to Section 8.1(g) (Parent or Merger Sub Breach) or Section 8.1(i) (Parent Failure to Close)," or if the deal hits its outside date at a time when Option Care could have terminated on those grounds. Section 8.1(i) applies only once every closing condition, including antitrust clearance, has been met and the buyers still refuse to close.

A regulatory block works differently. Section 8.1(b) lets either side walk away after a final, non-appealable court order or a law that prohibits the merger, and Section 8.3(c) does not list that clause. The same is true of a plain timeout on Tuesday, October 5, 2027, if no breach is involved. The agreement defines only two fees, the Parent Termination Fee and a $145,963,976 Company Termination Fee that Option Care owes if it takes a better offer or its board changes its recommendation. One exception matters. If a block resulted from the buyers breaching their antitrust efforts covenant, Option Care could argue that Section 8.1(g) applies and claim the fee.

McKesson Is Inside the Antitrust Covenant

Section 6.2(b) requires Parent and its affiliates to use reasonable best efforts to clear antitrust review, including "agreeing to limit any freedom of action." That duty ends where a remedy would cause a "Regulatory Material Adverse Effect" in Parent's good faith judgment. Section 1.1(uuu) defines that test as if the buyer group were "a company the size of" Option Care, with Option Care's revenue and EBITDA. Size-based tests like this are common, and the 2017 CVS and Aetna merger agreement used the same "company the size of" phrasing. Here it caps what McKesson can be required to give up at a level that would be material to Option Care, which forecast 2026 revenue of $5.675 billion to $5.775 billion in its July 29 earnings release.

The distinctive term is Section 1.1(e). It says McKesson and its affiliates "shall be deemed 'Affiliates' of Parent for all purposes," even though McKesson will own a minority stake, while CD&R's portfolio companies are excluded. That brings McKesson's own businesses within the efforts covenant. Section 6.2(d) also bars Parent and its affiliates from buying a business that "competes with or supplies drugs or medical supplies to" Option Care if that would materially delay approval. Section 4.15 keeps McKesson below 50% of the buyer until closing, with CD&R holding the larger stake.

Where Regulators Are Likely to Look

The likeliest area of review is McKesson's Oncology & Multispecialty segment. McKesson's 10-Q for the quarter ended June 30, 2026 says the segment includes specialty drug distribution, group purchasing, "infusion services" and direct to patient pharmacy. It booked $14.22 billion of revenue in the quarter, up from $10.66 billion a year earlier, a 33% rise by TradeFlock's calculation. Neither company has said what regulators will examine. McKesson has a history with enforcers. In 1998 a federal court granted the Federal Trade Commission's request to block its purchase of AmeriSource Health. TradeFlock has reported on how antitrust staff are stretching review of vertical deals, and specialty distribution is already shifting, as Veritiv's TempSafe RxShield launch shows.

Price, Financing and Timing

The $32.05 price is about 37% above Option Care's October 5 close, the companies said. CD&R will own about 51% and McKesson about 49% after investing about $1.4 billion, with a framework for McKesson to buy CD&R's stake later. The 8-K filed October 6 lists $2,873,295,853 of equity commitments from CD&R Fund XII and McKesson, up to $3.15 billion of committed debt plus a $500 million revolver, and no financing condition.

By TradeFlock's calculation, the $3.15 billion of debt is about 6.5 times the $487.5 million midpoint of the adjusted EBITDA forecast Option Care withdrew with the deal. Based on the 149,793,469 shares outstanding on October 2, as listed in the agreement, TradeFlock calculates an equity value of about $4.80 billion. That puts the company fee at about 3.0% and the parent fee at about 6.1%. The parties must make their Hart-Scott-Rodino filing within 20 business days of signing, and they expect to close in the first half of 2027.

Option Care closed at $31.01 on Wednesday, October 7, per Yahoo Finance closing prices in its price history, which also show a $23.37 close on October 5. That leaves the stock $1.04, or 3.2%, below the offer. Holders who do not vote for the deal can ask a Delaware court to set fair value under Section 262, according to the 8-K. Private equity has kept buying specialty pharmacy assets, as in Warburg Pincus's deal for PANTHERx Rare. The next filing to watch is Option Care's preliminary proxy, which should show how the board weighed regulatory risk.

Cover photo: An IV fluid bag on a stainless steel infusion stand, by Marcelo Leal on Unsplash, used under the Unsplash License.