Walgreens to go private in roughly $ 10 billion deal with sycamore partners

Struggling Drugstore Chain Walgreens is going private.

The company on Thursday said it inked a deal With private equity firm sycamore partners that will take it off the public market for an equity value of Around $ 10 billion.

Sycamore will pay $ 11.45 per share in cash for walgreens. Sharehlders could also receive up to $ 3 more per share in the future from sales of walgreens’ Primary-Care Businesses, Including Village Medical, Summit Health and Citymd. Walgreens said the total value of the transaction would be up to $ 23.7 billion when if involved debt and possible payouts down the line.

Walgreens and Sycamore Expect to Close the take-Private Deal in the Fourth Quarter of this year. Shares of walgreens jumped more than 5% in after-haurs trading on Thursday before being halted.

The historic deal ends walgreens’ tumultuous run as a public company, which began in 1927. Last Year and Had Fallen 70% for the past three years.

“While we make the program against our ambitious turnover Wentworth, who steepped into the role in 2023, said in a release on Thursday. “Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnings.

Stefan Kaluzny, Sycamore’s Managing Director, said in the release the transaction reflects the firm’s confidence in walgreens’ “Pharmacy-LED MODEL and Essential Role In IN DRIVING BATTORESS BATTARES FORICES FORITES FORITES Customers and communities. “

Walgreens will maintain its headquarters in Chicago. The company currently has more than 310,000 Employees Globally and 12,500 retail pharmacy locations access the US, Europe and Latin America, According to the release. Walgreens still plans to release its second -Quarter earnings on April 8.

Walgreens’s Market Value Reached a Peak of More Than $ 100 Billion in 2015 as Investors Gained Confidence in Its Health-Care Business and Expansion Plans, Making It One of the Most Prominent Ameteric Retail Company.

But the company’s market cap shrank to under $ 8 billion in late 2024 due to competition from its main rival cvs, grocery chains, big-box retailers and AmazonAlong with a Slew of Challenges. Walgreens has been squeezed by the transition out of the covid pandemic, pharmacy reimbursment headwinds, Softer Consumer Spending and a Troubled Push Into Health Care.

Both walgreens and cvs have Pivoted from Years of Store Expantions to Shuttering Hundreds of Retail Pharmacy Locations Across the Us to Shore Up Profits. But unlike cvs, which have diversified its business model by offering insurance and pharmacy benefits, walgreens revival doubled down on its on-failing retail pharmacy business.

In October, walgreens said it plans to Close roughly 1,200 of its drugstores Over the next three years, Including 500 in Fiscal 2025 Alone. Walgreens has Around 8,700 locations in the US, a Quarter of which it says. The company has also scaled back its push into primary care by cutting its stake in provider Villagemd.

Walgreens Tapped Health-Care Industry Veteran Tim Wentworth as Its New CEO in Late 2023 to Help Regain its footing.

The company has reportedly been seen as a potential private equity target in the past.

In 2019, Private Equity Firm Kkr Made A Roughly $ 70 Billion Buyout Offer to Walgreens, The Financial Times and Bloomberg Reported at the time.