Walgreens Boots Alliance to be sold to private equity firm Sycamore Partners

Walgreens Boots Alliance (WBA) has agreed to be acquired by an entity affiliated with New York private equity firm Sycamore Partners, as part of a strategy to turn around the business.

The total value of the transaction represents up to US$23.7 billion, according to a company statement. WBA shareholders will receive US$11.45 per share in cash at closing of the Sycamore transaction, which remains subject to the usual regulatory approvals.

WBA has previously tried to offload the company, but the American drugstore giant did not receive adequate offers due to challenging market conditions two years ago, so it scrapped plans for the sale.

Then in May 2024, the company’s stock price jumped amid renewed reports that it was trying again to offload Boots when speculation mounted that it was holding preliminary discussions with advisors over potential buyers. 

However, this time around, the US owner of the Boots pharmacy chain, entered into a definitive agreement with Sycamore Partners, which specializes in retail business investments and has invested in brands including Staples, Ann Taylor Lofy, Aéropostale, and Express.

Once the transaction is complete, WBA will no longer be a public company listed on the Nasdaq stock exchange. The deal is expected to close in Q4 of this year.

What will the deal bring?

WBA says it will be better positioned to “become the first choice for pharmacy, retail and health services,” following the acquisition.

Tim Wentworth, CEO, WBA says: “Throughout our history, Walgreens Boots Alliance has played a critical role in the retail health care ecosystem. We are focused on making health care delivery more effective, convenient, and affordable as we navigate the challenges of a rapidly evolving pharmacy industry and an increasingly complex and competitive retail landscape.”

Walgreen's has many drug stores across the US.“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.”

Hoping for a turnaround

Wentworth notes that Sycamore will provide WBA with the expertise and experience of a partner with a strong track record of successful retail turnarounds. 

“We believe this agreement provides shareholders premium cash value, with the ability to benefit from additional value creation going forward from monetization of the VillageMD businesses.”

Stefan Kaluzny, managing director of Sycamore Partners, speaks about the long-established history of both companies.

“For nearly 125 years, Walgreens, and for 175 years, Boots, along with their portfolio of trusted brands, have been integral to the lives of patients and customers. Sycamore has deep respect for WBA’s talented and dedicated team members, and we are committed to stewarding the company’s iconic brands,” he adds.

“This transaction reflects our confidence in WBA’s pharmacy-led model and essential role in driving better outcomes for patients, customers, and communities.”

Go-shop period

According to WBA, the deal also includes  a “go-shop” period, during which WBA, with its financial advisor, will “actively solicit, and depending on interest, potentially receive, evaluate, and enter into negotiations with parties that offer alternative proposals.”  The initial go-shop period is 35 days. 

“There can be no assurance that this process will result in a superior proposal. WBA does not intend to disclose developments with respect to the solicitation process unless and until the WBA Board of Directors has made a decision with respect to any potential superior proposal,”  a company statement concludes.