Walgreens Boots Alliance is considering a sale to private equity firm Sycamore Partners … [+]
Walgreens Boots Alliance is considering a sale to private equity firm Sycamore Partners, according to a new report.
An ‘exclusive’ story with three lines has been posted Tuesday in the Wall Street Journal comes with the drugstore giant’s shares suffering from a disastrous investment by former management in physician-staffed clinic operator VillageMD.
The newspaper said Walgreens older and Sycamore Partners “We have discussed a deal that could be completed early next year, assuming talks do not collapse,” the story said, citing “people familiar with the matter.”
Such reports have emerged in the past and never materialized into an actual deal or sale. There has also been speculation in recent years that Walgreens would spin off, sell or market its UK-based pharmacy chain Boots, but those talks went nowhere, became non-existent or fell apart.
A Walgreens spokesperson, reached for comment Tuesday, declined to comment on “rumors/speculation.”
Sycamore Partners specializes in “retail and consumer investments,” according to the company’s website. The Wall Street Journal report suggests that other partners may be needed to acquire Walgreens given the size of the company, which owns more than 12,000 drugstores in the U.S., Europe and Latin America.
Nearly a decade ago, Walgreens was valued at a market cap of more than $100 billion, but the company’s value today is less than 10% of that.
One of Walgreen’s biggest problems was its investment in VillageMD, a Chicago-based operator of primary care centers, doctors’ offices and clinics connected to Walgreen stores.
Walgreens said earlier this year it plans to scale back its investment in VillageMD after billions of dollars in losses and the need to focus on more profitable ventures, such as specialty pharmacies, to overhaul the drugstore chain. In June, Walgreens CEO Tim Wentworth told analysts that the company would remain an investor and partner in VillageMD but would “work toward an endpoint” with VillageMD management.