Walgreens strikes new deal
Walgreens Boot Alliance is set to make a deal that will increase patient access to its pharmacies across the southeastern U.S.
The company announced that they have entered into a definitive asset purchase agreement, pursuant to which Walgreens will acquire pharmacy patient prescription files and related pharmacy inventory of 185 Fred’s stores located across 10 Southeastern states. Under the agreement, the aggregate consideration to be paid by Walgreens to Fred’s is $165M, subject to adjustment, plus an amount equal to the value of related pharmacy inventory.
“This agreement increases patient access to Walgreens pharmacies in the Southeastern U.S., and allows us to introduce more people to Walgreens trusted pharmacy services in these communities. We look forward to welcoming Fred’s patients and team members who are hired into available Walgreens positions,” said Richard Ashworth, Walgreens President of Operations.
The transaction is part of a previously announced plan by Fred’s to unlock shareholder value by monetizing non-core assets through strategic transactions. Fred’s will continue to operate its retail stores at most of these locations after the pharmacies close. Once the transaction is complete, Fred’s will continue to operate approximately 162 pharmacies across nearly 600 stores. Fred’s pharmacy staff at the closing locations will have an opportunity to apply for any available positions at Walgreens.
The news comes shortly after the retailer was unable to escalate its shift to healthcare when a deal to buy hundreds of Rite Aid stores ended abruptly last year. An attempt by Walgreens Boots Alliance to buy Rite Aid and satisfy the Federal Trade Commission by selling 865 Rite Aid stores to Fred’s was unable to pass regulatory muster, according to Forbes. Walgreens instead bought just 2,186 of the more than 4,500 Rite Aids, turning Rite Aid into a multi-regional drugstore chain and preventing Fred’s from buying hundreds of drugstores all at once.
“With this agreement, we have taken a major step towards achieving one of our main goals of eliminating our debt balance,” said Joe Anto, Interim Chief Executive Officer and Chief Financial Officer of Fred’s. “We look forward to partnering with Walgreens to transition our pharmacy patients in these locations as smoothly as possible.”
Patients whose prescriptions are being transferred will be notified by letter, and the parties will work together to help ensure a smooth transition. Once patient prescriptions are transferred from Fred’s to Walgreens, patients will have access to Walgreens trusted pharmacy services across a network of approximately 9,800 pharmacies nationwide.
As of June 28, Walgreens operates approximately 9,800 drugstores with a presence in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, along with its omnichannel business, Walgreens.com. Approximately 400 Walgreens stores offer Healthcare Clinic or other provider retail clinic services.