The Walgreens logo is displayed at a Walgreens store on October 15, 2024 in San Rafael, California.
Justin Sullivan | Getty Images
Struggling drugstore chain Walgreens goes private.
The corporate on Thursday said it inked a deal with private equity firm Sycamore Partners that may take it off the general public marketplace for an equity value of around $10 billion.
Sycamore can pay $11.45 per share in money for Walgreens, representing a roughly 8% premium to the stock’s closing price on Thursday. Shareholders could also receive as much as $3 more per share in the longer term from sales of Walgreens’ primary-care businesses, including Village Medical, Summit Health and CityMD.
Walgreens said the full value of the transaction could be as much as $23.7 billion when including debt and possible payouts down the road.
Walgreens and Sycamore expect to shut the take-private deal within the fourth quarter of this 12 months. Shares of Walgreens jumped greater than 5% in after-hours trading on Thursday before being halted.
The historic deal ends Walgreens’ tumultuous run as a public company, which began in 1927. As of Thursday morning, shares of the corporate were up greater than 15% for 2025, however the stock was still down greater than 48% for the last 12 months and had fallen 70% for the past three years.
“While we’re making progress against our ambitious turnaround strategy, meaningful value creation will take time, focus and alter that is best managed as a non-public company,” Walgreens CEO Tim Wentworth, who stepped 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 powerful track record of successful retail turnarounds.
Stefan Kaluzny, Sycamore’s managing director, said in the discharge the transaction reflects the firm’s confidence in Walgreens’ “pharmacy-led model and essential role in driving higher outcomes for patients, customers and communities.”
Walgreens will maintain its headquarters in Chicago. The corporate currently has greater than 310,000 employees globally and 12,500 retail pharmacy locations across the U.S., Europe and Latin America, in line with the discharge. Walgreens still plans to release its second-quarter earnings on April 8.
Walgreens’s market value reached a peak of greater than $100 billion in 2015 as investors gained confidence in its health-care business and expansion plans, making it one of the outstanding American retail firms.
But the corporate’s market cap shrank to under $8 billion in late 2024 as a consequence of competition from its important rival CVS, grocery chains, big-box retailers and Amazon, together with a slew of challenges. Walgreens has been squeezed by the transition out of the Covid pandemic, pharmacy reimbursement headwinds, softer consumer spending and a troubled push into health care.
Each Walgreens and CVS have pivoted from years of store expansions to shuttering tons of of retail pharmacy locations across the U.S. to shore up profits. But unlike CVS, which has diversified its business model by offering insurance and pharmacy advantages, Walgreens largely doubled down on its now-flailing retail pharmacy business.
In October, Walgreens said it plans to close roughly 1,200 of its drugstores over the subsequent three years, including 500 in fiscal 2025 alone. Walgreens has around 8,700 locations within the U.S., 1 / 4 of which it says are unprofitable. The corporate 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 latest CEO in late 2023 to assist regain its footing.
The corporate has reportedly been seen as a possible private equity goal up to now.
In 2019, private equity firm KKR made a roughly $70 billion buyout offer to Walgreens, the Financial Times and Bloomberg reported on the time.
