Walgreens Nears $10B Go Private Deal with Sycamore: Report
Walgreens Boots Alliance is on the verge of being acquired by private equity firm Sycamore Partners for about $10 billion, according to a report from the Wall Street Journal. The deal could be announced as soon as Thursday.
The deal is pegged at $11.30 to $11.40 per share in cash to take the company private, a slight bump from the $9.94 closing price on March 3, when the stock jumped 5.5% on the news. That values Walgreens at just over $10 billion, a far cry from its $100 billion-plus peak in 2015. The WSJ first revealed Sycamore’s interest in Walgreens in early December, which sent shares bouncing off a 28-year low.
Sycamore, known for retail turnarounds like Staples in 2017, seems ready to take Walgreens private after a rough decade—shares are down 90% since that 2015 high, battered by thin pharmacy margins, a shaky VillageMD push, and competition from Amazon and Walmart.
The report indicated that Sycamore would take Walgreens off the public market in the deal, which is expected to lead to the pharmacy chain’s breakup. As part of the transaction, Sycamore will retain Walgreens’ core U.S. retail business while selling off other parts of the company, including the British pharmacy chain Boots, U.S. healthcare provider Village MD, U.S. drugstore chain Duane Reade, and No7 Beauty Co.
Walgreens’ latest figures show it’s running 12,500 locations globally—down from 13,500 a few years back and employing about 312,000 people. The company has previously explored going private. In 2019, private equity firm KKR made a $70 billion offer, roughly $63 to $68 per share, when it had a market value of over $50 billion.