{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "OPCH",
  "name": "Option Care Health, Inc.",
  "url": "https://frontierpicks.com/dossiers/OPCH/",
  "json_url": "https://frontierpicks.com/dossiers/OPCH.json",
  "status": "WATCHLIST",
  "current_conviction": "LOW",
  "archetype": {
    "code": "a5",
    "n": 5
  },
  "current_thesis": "Option Care Health's $32.05-per-share cash sale to CD&R and McKesson caps the shares, which closed at $31.70 on 11 November 2026, so they are more likely to lag than lead the S&P 500. The 3 December 2026 antitrust waiting-period expiry and the 15 December 2026 stockholder vote decide whether the deal stays on track.",
  "invalidation_trigger": "A daily close above $36.59, the highest close of the past year (2026-01-22), which would signal a bid above $32.05 and show the shares leading the S&P 500; a disclosed competing proposal above $32.05 would also prove the call wrong.",
  "catalyst_date": "2026-12-03",
  "portfolio": null,
  "pick": null,
  "themes": [
    "m-and-a-special-situations"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "Option Care Health, Inc. - Form DEFM14A - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001014739/000114036126042547/ny20084196x2_defm14a.htm",
      "date": "2026-11-09"
    },
    {
      "title": "BioPharmaWatch",
      "url": "https://www.biopharmawatch.com/news/OPCH/option-care-health-q3-2026-financial-results",
      "date": "2026-11-04"
    },
    {
      "title": "Wall Street Banks to Lead $3 Billion Debt Deal for CD&R Purchase",
      "url": "https://www.bloomberg.com/news/articles/2026-11-05/wall-street-banks-to-lead-3-billion-debt-deal-for-cd-r-purchase",
      "date": "2026-11-05"
    },
    {
      "title": "Option Care Health, Inc. - Form 8-K - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001014739/000110465926113904/tm2627097d1_ex99-1.htm",
      "date": null
    },
    {
      "title": "Option Care Health, Inc. - Form PREM14A - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001014739/000114036126041055/ny20084196x1_prem14a.htm",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "CD&R and McKesson agreed to acquire Option Care Health for $32.05 per share in cash, about $5.8 billion in enterprise value, with closing expected in the first half of 2027.",
      "source": "Deal press release, Form 8-K Exhibit 99.1, 2026-10-06",
      "as_of": "2026-10-06"
    },
    {
      "claim": "Third-quarter 2026 net revenue was $1,493.5 million, up 4.1%; adjusted EBITDA was $124.6 million, up 4.3%; GAAP net income was $57.4 million, up 10.8%; adjusted diluted EPS was $0.49, up 8.9%.",
      "source": "Q3 2026 earnings release, 2026-11-04",
      "as_of": "2026-11-04"
    },
    {
      "claim": "Third-quarter revenue of $1.494 billion and adjusted EPS of $0.49 beat consensus estimates of $1.476 billion and $0.48.",
      "source": "Benzinga, 2026-11-04",
      "as_of": "2026-11-04"
    },
    {
      "claim": "The special meeting to vote on the merger is set for 2026-12-15, with a record date of 2026-11-03; approval requires a majority of outstanding shares.",
      "source": "Option Care Health definitive proxy (DEFM14A), dated 2026-11-09",
      "as_of": "2026-11-09"
    },
    {
      "claim": "Both parties filed HSR notifications on 2026-11-03 and requested early termination; the waiting period is expected to expire on 2026-12-03 unless extended by a second request.",
      "source": "Option Care Health definitive proxy (DEFM14A), dated 2026-11-09",
      "as_of": "2026-11-09"
    },
    {
      "claim": "An amended debt commitment letter dated 2026-10-30 covers up to $3.15 billion in loans and $500 million in revolving credit; equity commitments total up to $2,873,295,853.",
      "source": "Option Care Health definitive proxy (DEFM14A), dated 2026-11-09",
      "as_of": "2026-11-09"
    },
    {
      "claim": "Goldman Sachs, Bank of America and Barclays were reported to be leading a roughly $3.1 billion debt sale for the deal, including leveraged loans and secured and unsecured bonds.",
      "source": "Bloomberg, 2026-11-05",
      "as_of": "2026-11-05"
    },
    {
      "claim": "The merger agreement sets a company termination fee of $145,963,976, a parent termination fee of $291,927,951 and an outside date of 2027-10-05.",
      "source": "Option Care Health preliminary proxy (PREM14A), dated 2026-10-28",
      "as_of": "2026-10-28"
    }
  ],
  "view_changes": [],
  "frame": null,
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Healthcare",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-09-30",
      "figures": {
        "revenue": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-04",
              "restated": null,
              "value_musd": 1493.5,
              "yoy_pct": 4.1
            },
            {
              "end": "2026-06-30",
              "filed": "2026-07-29",
              "restated": null,
              "value_musd": 1442.4,
              "yoy_pct": 1.9
            },
            {
              "end": "2026-03-31",
              "filed": "2026-04-30",
              "restated": null,
              "value_musd": 1350.7,
              "yoy_pct": 1.3
            },
            {
              "end": "2025-12-31",
              "filed": "2026-02-24",
              "restated": null,
              "value_musd": 1465.4,
              "yoy_pct": 8.8
            },
            {
              "end": "2025-09-30",
              "filed": "2025-10-30",
              "restated": null,
              "value_musd": 1435,
              "yoy_pct": 12.2
            },
            {
              "end": "2025-06-30",
              "filed": "2025-07-30",
              "restated": null,
              "value_musd": 1416.1,
              "yoy_pct": 15.4
            }
          ]
        },
        "gross_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-04",
              "restated": null,
              "pct": 19.1
            },
            {
              "end": "2026-06-30",
              "filed": "2026-07-29",
              "restated": null,
              "pct": 18.5
            },
            {
              "end": "2026-03-31",
              "filed": "2026-04-30",
              "restated": null,
              "pct": 19.4
            },
            {
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              "filed": "2026-02-24",
              "restated": null,
              "pct": 19.3
            },
            {
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              "filed": "2025-10-30",
              "restated": null,
              "pct": 19
            },
            {
              "end": "2025-06-30",
              "filed": "2025-07-30",
              "restated": null,
              "pct": 19
            }
          ]
        },
        "operating_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-04",
              "restated": null,
              "pct": 6
            },
            {
              "end": "2026-06-30",
              "filed": "2026-07-29",
              "restated": null,
              "pct": 5.9
            },
            {
              "end": "2026-03-31",
              "filed": "2026-04-30",
              "restated": null,
              "pct": 5.4
            },
            {
              "end": "2025-12-31",
              "filed": "2026-02-24",
              "restated": null,
              "pct": 6.2
            },
            {
              "end": "2025-09-30",
              "filed": "2025-10-30",
              "restated": null,
              "pct": 5.9
            },
            {
              "end": "2025-06-30",
              "filed": "2025-07-30",
              "restated": null,
              "pct": 5.8
            }
          ]
        },
        "pretax_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "value_musd": 78.9
        },
        "net_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "four_quarters_end": "2026-09-30",
          "value_musd": 57.4,
          "four_quarters_musd": 215.2
        },
        "operating_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "first_end": "2025-12-31",
          "value_musd": 322.1
        },
        "capital_spending": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "first_end": "2025-12-31",
          "value_musd": 40.5
        },
        "free_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "first_end": "2025-12-31",
          "value_musd": 281.7
        },
        "diluted_share_change": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "base_end": "2025-09-30",
          "pct": -7.7
        },
        "cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "value_musd": 299.1
        },
        "debt": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "value_musd": 1157.8,
          "composition": "long-term debt"
        },
        "net_cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "value_musd": -858.7
        },
        "deferred_revenue": {
          "status": "not reported"
        },
        "backlog": {
          "status": "not reported"
        },
        "receivables": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "value_musd": 505.6
        },
        "inventory": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "value_musd": 408
        },
        "equity": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-04",
          "value_musd": 1324.5
        },
        "market_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-11-02",
          "basis_filed": "2026-11-04",
          "value_musd": 4741.2
        },
        "enterprise_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-11-02",
          "basis_filed": "2026-11-04",
          "value_musd": 5599.9
        },
        "ev_sales": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-11-02",
          "basis_filed": "2026-11-04",
          "multiple": 1
        },
        "ev_ebit": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-11-02",
          "basis_filed": "2026-11-04",
          "multiple": 16.5
        },
        "pe": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-11-02",
          "basis_filed": "2026-11-04",
          "multiple": 22
        },
        "pb": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-11-02",
          "basis_filed": "2026-11-04",
          "multiple": 3.6
        },
        "fcf_yield": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-11-02",
          "basis_filed": "2026-11-04",
          "pct": 5.9
        }
      }
    },
    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-10-26",
      "short_pct_of_outstanding": 4.75,
      "days_to_cover": 1,
      "change_pct": -16.9
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-15",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-18",
          "bought_usd": 0,
          "sold_usd": 205471.8,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        },
        {
          "days": 365,
          "status": "ok",
          "from": "2025-11-16",
          "bought_usd": 1875412.36,
          "sold_usd": 1374170.15,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        }
      ]
    }
  },
  "body_markdown": "## Current Thesis\n\nOption Care Health's shares are pinned to a $32.05-per-share cash takeover by Clayton, Dubilier & Rice (CD&R) and McKesson, so they are more likely to lag than lead the S&P 500 over the next three months. Two dated events decide whether the deal stays on track: the federal antitrust waiting period, which expires on 2026-12-03 unless extended, and the stockholder vote on 2026-12-15.\n\nThe price already reflects a deal the market expects to close. The shares closed at $31.70 on 2026-11-11, just under the cash price, and have stayed between $31.50 and $31.70 at every close from 2026-11-04 to 2026-11-11.\n\nThe third-quarter report on 2026-11-04 lowered the risk that the buyers try to reprice. Net revenue rose 4.1% to $1,493.5 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) rose 4.3% to $124.6 million. Both growth rates are faster than in the second quarter. The definitive proxy, dated 2026-11-09, set the meeting date and confirmed that both sides filed for antitrust clearance on 2026-11-03.\n\n## Bull Case\n\n- **The business improved after signing.** Third-quarter net revenue grew 4.1% to $1,493.5 million and adjusted diluted earnings per share (EPS) rose 8.9% to $0.49, the company reported on 2026-11-04. Second-quarter revenue had grown only 1.9%, so a weak quarter is no longer a reason for the buyers to reopen the price.\n- **The debt is moving toward market.** The definitive proxy cites an amended debt commitment letter dated 2026-10-30 covering up to $3.15 billion in loans and a $500 million revolving credit facility. Bloomberg reported on 2026-11-05 that Goldman Sachs, Bank of America and Barclays were leading a roughly $3.1 billion debt sale for the deal, including leveraged loans and secured and unsecured bonds.\n- **The buyers pay more if they walk.** The proxy sets a parent termination fee of $291,927,951, twice the company's $145,963,976 fee. Equity commitments from CD&R Fund XII and McKesson total up to $2,873,295,853.\n- **The timeline is fixed.** Both sides filed Hart-Scott-Rodino (HSR) antitrust notifications on 2026-11-03 and asked for early termination, according to the 2026-11-09 definitive proxy. The special meeting is set for 2026-12-15, with a record date of 2026-11-03.\n\n## Bear Case\n\n- **Upside is capped at $32.05.** The shares closed at $31.70 on 2026-11-11. A fixed cash payout leaves almost no room to rise, so a rising S&P 500 leaves them behind.\n- **A rival bid is unlikely.** The preliminary proxy dated 2026-10-28 says the buyers refused a go-shop clause, which would have let the company seek other offers after signing. The final agreement has a no-shop clause with a fiduciary out, and a higher offer would also have to cover the $145,963,976 company termination fee.\n- **More regulators than antitrust alone.** Closing also requires state healthcare transaction notice reviews, state pharmacy licensure approvals and consents from certain state health regulators, according to the definitive proxy. The outside date of 2027-10-05 leaves room for a long review.\n- **No guidance and no call.** The company withdrew its financial guidance after signing and released third-quarter results on 2026-11-04 without a conference call. Operating detail between now and closing will be thin.\n\n## Setup & Price Structure\n\nThe shares closed at $31.70 on 2026-11-11, up 31.7% from $24.07 on 2026-08-13 in adjusted daily closes. Nearly all of that gain came on the 2026-10-06 deal announcement. The 52-week closing low was $19.52 on 2026-05-15.\n\nThe 50-day moving average stood at $27.78 and the 200-day at $26.15 on 2026-11-11. Both still carry the pre-deal prices. A close back toward the 50-day average would mean the market sees real risk to the deal.\n\nThe 52-week intraday high was $36.80 on 2026-01-23, and the last close sits 13.9% below it. Only a higher offer could carry the shares back to that range. Above the 50-day average and below the cash price, the shares track the time left to closing and the odds of clearance.\n\n## Catalyst Calendar\n\n- **2026-12-03:** Scheduled expiry of the Hart-Scott-Rodino antitrust waiting period, unless terminated early or extended by a second request. A clean expiry removes the federal antitrust hurdle. A second request from the FTC or DOJ would push closing out and widen the gap to $32.05.\n- **2026-12-15:** Virtual special meeting of stockholders to vote on the merger. Approval by a majority of outstanding shares leaves only state healthcare and pharmacy-licensure approvals before closing.\n- **~2027-06-30 (est.):** Expected deal closing, guided to the first half of 2027; outside date 2027-10-05. Closing pays out $32.05 in cash. Slippage toward the outside date would point to friction in state reviews.\n\n## What Would Change Our Mind\n\nA daily close above $36.59, the highest close of the past year (2026-01-22), which would signal a bid above $32.05 and show the shares leading the S&P 500; a disclosed competing proposal above $32.05 would also prove the call wrong.\n\n## Correlation Notes\n\nWhile the deal is pending, the shares follow the deal's odds more than their health-services peers. Earnings and sector moves at Teladoc (TDOC), AMN Healthcare (AMN), ICON (ICLR) and IQVIA (IQV) should move Option Care Health little. Credit markets matter more, because the roughly $3.1 billion debt sale Bloomberg reported on 2026-11-05 funds most of the purchase. So does any regulatory news on McKesson (MCK), the strategic buyer. In a falling S&P 500 the pinned price would hold up better than the index; in a rising one it lags.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-12T03:47:30+00:00",
  "last_synthesized": "2026-11-12",
  "date_modified": "2026-11-12",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}