Walgreens Boots Alliance recently announced that it has agreed to be acquired by Sycamore Partners in a deal valued at $23.7 billion. Sycamore Partners, a private equity firm specializing in retail, consumer, and distribution-related investments, will be taking over the company in a transaction expected to close in the fourth quarter of this year.
The acquisition will see Walgreens Boots Alliance become a private company, with its common stock no longer listed on the Nasdaq stock market. The company will continue to operate under its various brand names, including Walgreens, Boots Duane Reade, No7 Beauty Company, and Benavides, and will maintain its headquarters in the Chicago area.
The decision to go private was driven by the need for time, focus, and change to effectively implement the company’s turnaround strategy. By partnering with Sycamore Partners, which has a track record of successful retail turnarounds, Walgreens Boots Alliance aims to create additional value and position itself as the preferred choice for pharmacy, retail, and health services.
Shareholders of WBA will receive $11.45 per share in cash at the closing of the Sycamore transaction, as well as a non-transferable right to receive up to $3 in cash per share from the future monetization of WBA’s interests in VillageMD. WBA is currently evaluating options regarding its significant debt, including the $3.4 billion owed by VillageMD as of February 28.
Stefan Kaluzny, managing director of Sycamore Partners, expressed the firm’s commitment to stewarding WBA’s iconic brands and respecting its team members. The acquisition is expected to enhance WBA’s position in the market and drive value creation in the future.
The decision to go private comes after a period of losses for Walgreens, with setbacks attributed to its primary care network, VillageMD. Plans for expansion of the network were halted in late 2023, leading to a cost-cutting initiative and the closure of several clinics. Despite these challenges, Walgreens remains a significant player in the healthcare industry, with thousands of locations worldwide and a global workforce of over 300,000 employees.
As the acquisition process moves forward, WBA will release its fiscal year 2025 second-quarter financial results and file its quarterly report on April 8. The deal with Sycamore Partners marks a new chapter for Walgreens Boots Alliance as it seeks to drive growth and innovation in the evolving healthcare landscape.
