Walgreens Boots Alliance is on the verge of finalizing a take care of private-equity agency Sycamore Companions to take the embattled drugstore chain non-public in a transaction valued at roughly $10 billion, in accordance with a report.
Negotiations are in superior levels, with each side aiming to seal the settlement as quickly as Thursday — although a last-minute hurdle might nonetheless delay or derail talks, sources instructed the Wall Road Journal.
The deal is predicted to contain Sycamore paying between $11.30 and $11.40 per share in money, with the potential inclusion of contingent worth rights that might enable shareholders to learn if sure monetary benchmarks are met.
If the acquisition proceeds, Sycamore is more likely to retain Walgreens’ core US retail pharmacy enterprise whereas promoting or taking public different segments of the corporate, sources instructed the Journal.
Discussions between Walgreens and Sycamore first surfaced in December amid the pharmacy large’s ongoing struggles.
As soon as a dominant presence in American retail, Walgreens has confronted years of economic and operational challenges, with its inventory value declining steadily over the previous decade.
Final month, Walgreens introduced it was shuttering 5 Southern California areas as a part of an general plan to completely shut 1,200 shops nationwide.
The Chicago-based firm which owns 8,700 areas throughout the nation has stated that only one in 4 of its shops are worthwhile.
A take-private transaction would mark a major shift for the 120-year-old firm, which has been publicly traded since 1927.
At its peak in 2015, Walgreens had a market capitalization exceeding $100 billion.
Nonetheless, its worth had plummeted to beneath $8 billion by late 2024 because it grappled with shrinking revenue margins and mounting competitors.
In contrast to its chief rival, CVS Well being, which expanded into insurance coverage and pharmacy advantages, Walgreens doubled down on its conventional retail pharmacy mannequin.
A foray into main care did little to reverse its fortunes.
Below CEO Tim Wentworth, the corporate has since shifted focus, scaling again its healthcare investments and aggressively slicing prices.
Earlier this yr, Walgreens shares briefly rallied after reporting better-than-expected adjusted earnings, although the monetary pressure of widespread retailer closures remained evident.
In January, the Justice Division sued Walgreens, accusing it of fueling the opioid disaster by improperly allotting prescription painkillers.
Shortly after, the corporate suspended its quarterly dividend to protect money.
New York-based Sycamore Companions, identified for its investments in retail and client manufacturers, has beforehand acquired office-supply retailer Staples and smoothie chain Playa Bowls.
The Walgreens deal, if accomplished, would mark considered one of its largest transactions thus far, reshaping the way forward for the pharmacy chain.
