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Walgreens Boots Alliance has decided to close a monumental chapter in its history as a public company, finalizing a $10 billion agreement with Sycamore Partners, a private equity firm. This move marks a significant shift for the pharmacy giant.
Under the terms of the deal, Sycamore Partners is set to purchase Walgreens at $11.45 per share. This offer represents a substantial 30% premium over Walgreens’ stock value prior to when discussions about the transaction were initially leaked in December. Consequently, this purchase sets Walgreens’ equity value at roughly $10 billion, as announced on Thursday.
Sycamore plans to retain Walgreens’ U.S. retail operations while either selling or spinning off the remaining segments of the business, which includes the United Kingdom’s Boots pharmacy chain. Additionally, Walgreens’ investors may receive an extra $3 per share based on the eventual sale of Walgreens’ primary care entity, VillageMD.
Factoring in debt and contingent upon reaching certain future performance benchmarks, the transaction could ultimately price Walgreens at a staggering $23 billion. Notably, Italian billionaire Stefano Pessina, who serves as Walgreens’ executive chair and is its largest shareholder, will continue to hold a significant minority stake in the company.
This unfolding story continues to develop.
