Walgreens Boots Alliance is nearing a deal to sell itself to private equity firm Sycamore Partners for around $10 billion. The transaction could be announced as soon as Thursday, according to people familiar with the matter. The deal would take Walgreens private after nearly a century as a publicly traded company.
It also paves the way for a potential breakup of the drugstore chain. Under the terms being discussed, Sycamore would acquire Walgreens for between $11.30 and $11.40 per share in cash. This represents a premium of about 15% to the stock’s closing price on Monday.
Sycamore is working with financial institutions including Bank of America and JPMorgan to secure financing for the deal. The private equity firm plans to take Walgreens private and explore options to sell or take public some of its divisions.
Walgreens nears privatization deal with Sycamore
These divisions include the Boots chain in the UK, healthcare provider VillageMD, New York-based drugstore chain Duane Reade, and beauty brand No7 Beauty Co. Sycamore would aim to retain Walgreens’ core U.S. retail operation, which generates most of the company’s revenue. Walgreens’ stock surged about 5% in after-hours trading following reports of the potential deal.
During regular trading on Monday, the stock had fallen 3.9%. The acquisition marks a significant shift for Walgreens, which has faced challenges in the competitive pharmacy retail sector. The company’s market value has plummeted from over $100 billion in 2015 to less than $9 billion currently.
Analysts and investors will be closely watching to see if the deal is finalized and what strategic changes Sycamore may implement. The impact on Walgreens’ extensive store network and thousands of employees also remains to be seen.
Photo by; Stephanie Rhee on Unsplash