Deerfield-based Walgreens Boots Alliance is being acquired by an entity affiliated with a private equity firm for $10 billion, the retail pharmacy giant announced Thursday afternoon.
An entity affiliated with Sycamore Partners will acquire Walgreens in a deal that will take the company private. Sycamore is a New York-based private equity firm specializing in retail, consumer and distribution-related investments.
The company will continue to operate under the names Walgreens, and Boots in the U.K., and its headquarters will remain in the Chicago area, according to a news release. The deal is expected to close in the fourth quarter of this year.
“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 Walgreens CEO Tim Wentworth in a news release. “Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds.”
Speculation has swirled for months about the private equity deal that was announced Thursday.
Walgreens has been struggling for years with industry-wide challenges including issues related to medication reimbursements as well as changing consumer habits. Walgreens has also been dealing with the fallout from a previous attempt to become more of a health care destination by investing billions of dollars into primary care provider VillageMD, with plans to put Village Medical clinics in 1,000 of its stores by 2027. Walgreens, however, reversed course on that plan.
In response to those challenges and others, Walgreens announced plans in October to shutter 1,200 stores over the next three years, including in Chicago. Walgreens has also been slashing costs for years, including through layoffs in Illinois and other locations. Walgreens also recently suspended its practice of paying cash dividends to stockholders for the first time in 92 years.
Wentworth had previously unveiled a plan to turn the company around, partly by re-focusing on its historic work as a retail pharmacy operation.
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