Walgreens Agrees to Acquisition by Sycamore Partners
Walgreens Boots Alliance (WBA) said Thursday (March 6) that it has entered into a definitive agreement to be acquired by an entity affiliated with private equity firm Sycamore Partners.
WBA will continue to operate under Walgreens, Boots and its consumer brands; will keep its headquarters in the Chicago area; and “will be better positioned to become the first choice for pharmacy, retail and health services,” the retail pharmacy company said in a Thursday press release.
Subject to customary closing conditions, the transaction is expected to close in the fourth quarter, according to the release.
The transaction will help the company “navigate the challenges of a rapidly evolving pharmacy industry and an increasingly complex and competitive retail landscape,” WBA CEO Tim Wentworth said in the release.
“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,” Wentworth said. “Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds.”
Sycamore specializes in retail, consumer and distribution-related investments, according to the release.
“Sycamore has deep respect for WBA’s talented and dedicated team members, and we are committed to stewarding the company’s iconic brands,” Sycamore Partners Managing Director Stefan Kaluzny said in the release. “This transaction reflects our confidence in WBA’s pharmacy-led model and essential role in driving better outcomes for patients, customers and communities.”
It was reported in December that WBA and Sycamore were discussing a deal that would see the retail pharmacy company sold to the private equity firm and that a deal could be completed early this year.
Walgreens has been under pressure because of challenges facing the pharmacy business and has seen its shares heading downward for nearly a decade.
Sycamore’s major deals include a $7 billion acquisition of Staples in 2017, and its current investments include clothing brands Hot Topic, Ann Taylor and Chico’s.
Wentworth said in January during a WBA earnings call that the company’s turnaround process will take time and that company officials are working to stabilize the retail pharmacy, optimize the store footprint and address reimbursement models.
The post Walgreens Agrees to Acquisition by Sycamore Partners appeared first on PYMNTS.com.