Walgreens Going Private Following Sale to Private Equity Firm
Walgreens Boots Alliance (WBA) is going private after entering into an acquisition agreement with private equity firm Sycamore Partners in a deal valued at $23.7 billion.
According to the companies, the marriage of Walgreens healthcare expertise and Sycamore’s background in retail and consumer services, will better position the drug store chain as consumer’s first choice for pharmacy, retail and health services.
The Company will continue to operate under Walgreens, Boots and its trusted portfolio of consumer brands and maintain its Chicago headquarters.
“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,” said Tim Wentworth, CEO of Walgreens Boots Alliance. “Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds.”
“Sycamore has deep respect for WBA’s talented and dedicated team members, and we are committed to stewarding the Company’s iconic brands,” said Stefan Kaluzny, managing director of Sycamore Partners. “This transaction reflects our confidence in WBA’s pharmacy-led model and essential role in driving better outcomes for patients, customers and communities.”
The transaction is expected to close in the fourth quarter, subject to customary closing conditions, including approval by WBA shareholders and the receipt of required regulatory approvals. The transaction is not subject to a financing condition and Sycamore has received fully committed financing for the transaction.
Reports of a deal with Sycamore initially surfaced in December, when the Wall Street Journal reported discussions between the two. That news came just weeks after Walgreens announced plans to close approximately 1,200 stores over the next three years, with 500 locations on the chopping block in 2025. In June of 2024, the drug store chain said it was closing 300 stores.
In its most recent financials, Walgreens announced sales in the first quarter were up 7.5% to $39.5 billion, but its year-over-year net loss nearly quadrupled to $265 million.
