Walgreens Boots Alliance acquisition by Sycamore Partners

SOURCE www.npr.org
Walgreens Boots Alliance has agreed to be acquired by private equity firm Sycamore Partners for $10 billion, allowing the struggling retailer to make changes without worrying about Wall Street's reaction. The buyout will give Walgreens more flexibility to improve its business after years of losing money.

Key Points

  • Acquisition by Sycamore Partners for $10 billion
  • Deal includes potential additional $3 per share for shareholders
  • Walgreens dealing with thin prescription reimbursement and rising costs
  • Plan to close 1,200 U.S. locations
  • Management focusing on improving cash flow generation

Pros

  • More flexibility to make changes to improve its business
  • Potential for shareholders to receive additional $3 per share
  • Deal represents a nearly 30% premium to the share price in December

Cons

  • Struggling with thin prescription reimbursement and rising costs
  • Facing competition from other retailers for bargain-seeking shoppers
  • Plan to close 1,200 U.S. locations