Private equity firm Sycamore partners has acquired Walgreens Boots Alliance in a transaction estimated to total $23.7 billion.
Walgreens shareholders will receive $11.45 per share in cash at the deal’s closing and one non-transferable right to receive up to $3 in cash per WBA share from the future monetization of WBA’s debt and equity interests in VillageMD, which includes the Village Medical, Summit Health and CityMD businesses, Walgreens and Sycamore pointed out in a joint statement.
Under the new ownership arrangement, Walgreens is evaluating a variety of options with respect to its significant debt and equity interests in VillageMD, the companies maintained. A committee will assemble after the Walgreens transaction closure involving groups holding an interest in VillageMD, including members of the former Walgreens Boots Alliance board and Sycamore, to decide on the medical service operation’s divestment.
In a joint statement, Walgreens and Sycamore asserted leveraging Walgreens’ healthcare expertise and Sycamore’s experience in retail and related operations will put the newly private company into a better position to thrive in its future pharmacy, retail and health services-focused business. The Walgreens, Boots and consumer brands operated by the companywill remain in place. Walgreens will maintain its Chicago-area headquarters .
In announcing the privatization, Tim Wentworth, Walgreens CEO, said, “Throughout our history, Walgreens Boots Alliance has played a critical role in the retail healthcare ecosystem. We are focused on making healthcare delivery more effective, convenient and affordable as we navigate the challenges of a rapidly evolving pharmacy industry and an increasingly complex and competitive retail landscape. While we are making progress against our ambitious turnaround strategy, meaningful value creation will take time, focus and change that is better managed as a private company. Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds. The WBA board considered all these factors in evaluating this transaction, and we believe this agreement provides shareholders premium cash value, with the ability to benefit from additional value creation going forward from monetization of the VillageMD businesses.”
Stefan Kaluzny, managing director of Sycamore Partners, “For nearly 125 years, Walgreens, and for 175 years, Boots, along with their portfolio of trusted brands, have been integral to the lives of patients and customers. Sycamore has deep respect for WBA’s talented and dedicated team members, and we are committed to stewarding the company’s iconic brands. This transaction reflects our confidence in WBA’s pharmacy-led model and essential role in driving better outcomes for patients, customers and communities.”
