Walgreens Close to Privatization Deal: Report
Word on the street – starting with The Wall Street Journal – has it that the reported move by Walgreens Boots Alliance, Inc. (WBA) to become a privately owned company is close at hand. According to a WSJ report, the company is nearing a potential $10 billion deal with private equity firm Sycamore Partners.
More details on the switch from a public to privately held organization may be confirmed by the parties as soon as this week. As a result of the acquisition, the larger WBA may have a change in structure, with a decoupling of parts of the business, such as the VillageMD health care unit. Walgreens has been a public company since 1927.
WBA has experienced ebbs and flows since the 2014 merger between the Deerfield, U.S.-based Walgreens and the UK-headquartered Alliance Boots. In 2024, Walgreens announced that it intends to shutter around 1,200 underperforming stores in the United States, with 500 closures possible this year. According to the company’s latest financial report, released in January, first-quarter sales rose 7.5% on a year-over-year (YoY) basis to top $39.5 billion, with a YoY dip in adjusted earnings per share from $0.66 to $0.51.
New York-based Sycamore Partners has a diverse portfolio of retail and consumer businesses. The company recently acquired the Playa Bowls restaurant concept, and its other holdings include Staples, Hot Topic, Talbots and The Limited, among other companies. More recently, Sycamore Partners was floated as a possible buyer of the Family Dollar discount retail chain owned by Dollar Tree.
Deerfield, Ill.-based Walgreens currently operates nearly 9,000 retail locations across the United States, Puerto Rico and the U.S. Virgin Islands. The company is No. 6 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. Seattle-based Amazon is No. 2 on The PG 100.
