Drugstore chain Walgreens Boots Alliance is going private as announced on Thursday. Walgreens said it finalized a buyout deal with private equity firm Sycamore Partners. This Walmart deal will make it private from public for an equity value of around $10B.
As per the report Sycamore will pay $11.45 per share in cash for Walgreens, representing a roughly 8% premium to the stock is closing price on Thursday. There is a possibility that the shareholders could receive up to $3 more per share in the future from sales of Walgreens’ primary-care businesses. This including Village Medical, Summit Health and CityMD.
Sycamore Partners Walgreens
A private equity firm, Sycamore Partners specializes in retail and consumer investments. It acquires distressed retailers for profit. The popular brands acquired by the private equity firm are Staples, Talbots and Nine West.
As per Walgreens, the total value of the transaction with Sycamore is up to $23.7B. This includes debt and possible payouts in the future.
Walgreens and Sycamore expected the deal to go private in the 2025 Q4. This landmark deal shall end the struggles of Walgreens’ run as a public company, which began in 1927.
Walgreens $10B buyout deal
Walgreens CEO Tim Wentworth said, “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”.
He added, “Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds.
Why is Walgreens flailing?
Walgreens’s market value, which was at its peak in 2015 at about $100B, has shrunk to a mere $8B in late 2024. The main reason for the decline is competition from CVS, grocery chains, big-box retailers and Amazon.
Both Walgreens and CVS have pivoted from expansion to shuttering hundreds of retail pharmacy locations for profit. While CVS diversified its business model by offering insurance and pharmacy benefits, Walgreens largely doubled down on its now-flailing retail pharmacy business.
Walgreen’s cost cutting
Walgreens will maintain its headquarters in Chicago. In October, Walgreens said it plans to close roughly 1,200 of its drugstores over the next three years, including 500 in fiscal 2025 alone. The company 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 new CEO in late 2023 to help regain its footing.
Walgreens a private equity target
Walgreens has been seen as a classic private equity target in the past. In 2019, private equity firm KKR made a roughly $70 billion buyout offer to Walgreens as per reports
Walgreens stock
As of Thursday morning, shares of the company were up more than 15% for 2025, but the stock was still down more than 48% for the last year and had fallen 70% for the past three years. Walgreens stock jumped more than 5% in after-hours trading on Thursday before it was halted.
Walgreens will release its Q2 earnings on April 8 as per schedule.
