The Walgreens logo design is shown at a Walgreens shop on October 15, 2024 in San Rafael,California
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Struggling pharmacy chain Walgreens is going personal.
The firm on Thursday claimed it inked a deal with personal equity company Sycamore Partners that will certainly take it off the general public market for an equity worth of around $10 billion.
Sycamore will certainly pay $11.45 per share in cash money for Walgreens, standing for an about 8% costs to the supply’s closing cost onThursday Shareholders can likewise get as much as $3 even more per share in the future from sales of Walgreens’ primary-care organizations, consisting of Village Medical, Summit Health and CityMD.
Walgreens claimed the overall worth of the deal would certainly depend on $23.7 billion when consisting of financial debt and feasible payments down the line.
Walgreens and Sycamore anticipate to shut the take-private handle the 4th quarter of this year. Shares of Walgreens leapt greater than 5% in after-hours trading on Thursday prior to being stopped.
The historical bargain ends Walgreens’ turbulent run as a public firm, which started in 1927. As of Thursday early morning, shares of the firm were up greater than 15% for 2025, however the supply was still down greater than 48% for the in 2014 and had actually dropped 70% for the previous 3 years.
“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,” Walgreens CHIEF EXECUTIVE OFFICER Tim Wentworth, that entered the duty in 2023, claimed in a launch onThursday “Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds.
Stefan Kaluzny, Sycamore’s managing director, said in the release the transaction reflects the firm’s confidence in Walgreens’ ” pharmacy-led version and important duty in driving far better end results for clients, consumers and neighborhoods.”
Walgreens will maintain its headquarters in Chicago. The company currently has more than 310,000 employees globally and 12,500 retail pharmacy locations across the U.S., Europe and Latin America, according to the release. Walgreens still plans to release its second-quarter earnings on April 8.
Walgreens’s market value reached a peak of more than $100 billion in 2015 as investors gained confidence in its health-care business and expansion plans, making it one of the most prominent American retail companies.
But the company’s market cap shrank to under $8 billion in late 2024 due to competition from its main rival CVS, grocery chains, big-box retailers and Amazon, along with a slew of challenges. Walgreens has been squeezed by the transition out of the Covid pandemic, pharmacy reimbursement headwinds, softer consumer spending and a troubled push into health care.
Both Walgreens and CVS have pivoted from years of store expansions to shuttering hundreds of retail pharmacy locations across the U.S. to shore up profits. But unlike CVS, which has diversified its business model by offering insurance and pharmacy benefits, Walgreens largely doubled down on its now-flailing retail pharmacy business.
In October, Walgreens said it plans to close roughly 1,200 of its drugstores over the next three years, including 500 in fiscal 2025 alone. Walgreens has around 8,700 locations in the U.S., a quarter of which it says are unprofitable. The company has also scaled back its push into primary care by cutting its stake in provider VillageMD.
Walgreens tapped health-care industry veteran Tim Wentworth as its new CEO in late 2023 to help regain its footing.
The company has reportedly been seen as a potential private equity target in the past.
