Sycamore Partners to take Walgreens private in deal worth up to $23.7 billion

On Thursday, Walgreens Boots Alliance Inc (NASDAQ:WBA) agreed to be acquired by private equity firm Sycamore Partners in a landmark leveraged buyout valued at up to $23.7 billion, including debt and additional payouts. The transaction will end Walgreens's longstanding status as a publicly traded company, which has spanned almost a century.

Under the terms of the deal, Sycamore Partners will purchase Walgreens shares at $11.45 each in cash. Additionally, Walgreens shareholders might receive up to $3 more per share contingent on the future sale of the company's primary-care assets.

The acquisition's total valuation, which includes assumed debt and the possibility of future additional payouts to shareholders, is expected to reach around $24 billion.

Tim Wentworth, Chief Executive Officer, Walgreens Boots Alliance, said, “Throughout our history, Walgreens Boots Alliance has played a critical role in the retail healthcare ecosystem. We are focused on making healthcare delivery more effective, convenient and affordable as we navigate the challenges of a rapidly evolving pharmacy industry and an increasingly complex and competitive retail landscape. 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. Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds."

The news of this acquisition comes as Walgreens has faced various challenges in the retail pharmaceutical sector. The buyout by Sycamore Partners is poised to transform the company's financial structure and ownership, as it transitions from a public entity to a privately held organization.

Investors and market watchers will be keeping a close eye on the progress of the transaction, which stands as one of the most substantial leveraged buyouts in recent history. The completion of the deal is subject to customary closing conditions and regulatory approvals and is expected in the fourth quarter of this year.

Walgreens has a 35-day “go-shop” period.