Boots and Walgreens become independent after Sycamore Partners’ buyout

UK beauty retailer Boots and US pharmacy Walgreens have become standalone private companies after Sycamore Partners acquired Walgreens Boots Alliance (WBA), its parent company. The acquisition takes WBA private and makes The Boots Group an independent company.

The deal also covers Shields Health Solutions, CareCentrix, and VillageMD, now privately held, independent companies. Under the agreement, WBA shareholders receive US$11.45 per share in cash, plus a contingent right of up to US$3 per share tied to the future monetization of VillageMD.

The sale follows years of financial strain for WBA, which has lost about 90% of its stock market value over the last decade. The company has closed hundreds of stores globally while struggling with debt and competition.

Stefan Kaluzny, managing director of Sycamore, says: “We are pleased to have closed this momentous transaction with an outstanding brand that has been a cornerstone of American communities for nearly 125 years. Walgreens benefits millions of Americans, and I am confident that, enhanced by the flexibility of operating as a private, standalone organization, it can move with certainty, speed, and focus to deliver meaningful value to its customers.”

As part of the transaction, WBA shares are delisted from Nasdaq. The company says going private will allow it to advance its turnaround strategy without the scrutiny of public markets.

Deal lead-up

WBA had been exploring a sale for several years after struggling with declining sales, rising debt, and increased competition. An earlier attempt to sell the business in 2022 was abandoned due to weak offers and challenging market conditions.

In May 2024, speculation resurfaced when WBA’s stock price jumped on reports of renewed talks with potential buyers.

This led to a definitive agreement with New York-based private equity firm Sycamore Partners. The total value of the transaction represented up to US$23.7 billion, according to a company statement in March this year.

WBA had been exploring a sale for several years after struggling with declining sales.In June, WBA shareholders voted in favor of a US$10 billion deal, with 96% backing the agreement.

Boots’ new status

Italian billionaire Stefano Pessina and his family, who have a long history of investing in Boots, are reinvesting 100% of their interests in the company, retaining a minority stake as part of the new ownership structure.

The new Boots Group will be registered and headquartered in the UK as part of its new standalone structure, with its current leadership team remaining in place.

The group’s portfolio includes Boots UK & Ireland, Boots Opticians, No7 Beauty Company, retail pharmacies in Thailand, international franchise operations, Farmacias Benavides in Mexico, Alliance Healthcare in Germany, and retail investments in China.

“I am hugely proud of the business that we have created and excited about this new step under new ownership,” Boots CEO Ornella Barra concludes.

“I would like to thank our colleagues across the world who have built this incredible company, and I am honoured to be leading these businesses on the next stage of our journey. Sycamore’s retail experience and our strong foundation position The Boots Group to deliver against our strategy of being a leader in our markets and the communities we serve.”