Deerfield, Ill. and New York City — Walgreens Boots Alliance (Nasdaq: WBA) has entered into a definitive agreement to be acquired by an entity affiliated with private equity firm Sycamore Partners. The total value of the transaction is $23.7 billion, according to WBA, including an equity value of $10 billion, as well as debt, capital leases and potential future payouts from the opioid and Everly Health Solutions COVID-19 testing settlements.
Upon completion of the transaction, which is expected to close in the fourth quarter of 2025, WBA common stock will be delisted from the Nasdaq Stock Market. WBA will continue to operate as a private company under Walgreens, Boots and its portfolio of consumer brands, and also will maintain its headquarters in Deerfield.
The per-share price is valued at $11.45, which represents a premium of up to 63 percent over the WBA closing share price of $8.85 on Dec. 9, 2024, the day before reports came out about a potential sale. Under the terms of the agreement, WBA shareholders will also receive one non-transferable divested asset proceed right (i.e. DAP right) to receive up to $3.00 per WBA share from the future monetization of WBA’s debt and equity interests in VillageMD, which includes the Village Medical, Summit Health and CityMD business lines.
WBA announced last October that it planned to close about 1,200 store locations over the next three years, including approximately 500 closures in its fiscal year 2025, which ends in August.
“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,” said Tim Wentworth, CEO of WBA. “Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds.”
Centerview Partners is serving as financial advisor to WBA, while Kirkland & Ellis LLP is acting as the retailer’s legal advisor and Ropes & Gray LLP is acting as its healthcare regulatory counsel. Morgan Stanley & Co. LLC was also a financial advisor and provided a fairness opinion to the WBA board of directors.
WBA is a retail and pharmaceutical company with roughly 12,500 locations across the United States, Europe and Latin America. The company’s stock price opened at $11.38 per share on Friday, March 7, the morning after the deal was announced. This is a nearly 42 percent decrease from a year ago when the stock price traded at $19.58.
Sycamore Partners’ team of financial advisors includes UBS Investment Bank as lead financial advisor; Goldman Sachs and J.P. Morgan as co-lead financial advisors; and Citi and Wells Fargo as financial advisors. Davis, Polk & Wardwell LLP is acting as legal counsel to the firm, and Bass Berry & Sims PLC is acting as its healthcare regulatory counsel.
Based in New York City, Sycamore Partners specializes in consumer, distribution and retail-related investments. The firm has raised approximately $10 billion in aggregate committed capital since its inception in 2011.
— Channing Hamilton