The Walgreens Boots Alliance said Thursday that she had agreed to be bought by Sycamore Partners, a private capital firm, in a $ 10 billion agreement that would get the pharmacy chain in trouble with the brilliance of public markets.
Walgreens has faced decreasing recipe refunds and falling sales in its retail countries for years – a trend that has hit a large number of pharmacy chains. After rapidly expanding their brick and mortar trail, pharmacy companies now say that it is more difficult to return a profit from the sale of recipes, citing pressure from the mediators.
Careful expenses from consumers who are being caught with inflation, coupled with competition from retail behemoths such as Amazon and Walmart, has also wet the sales of pharmacies of household items ranging from snacks to cleaning supplies.
Walgreens, who owns the Duane Reade chain in the New York City area and Boots Pharmacies in Britain, has closed stores, with hundreds of others locked in the coming years.
Purchase follows a decrease of approximately 50 percent of the company’s stock price in the past year. Its market value, which reached over $ 100 billion a decade ago, fell under $ 8 billion before news of the possible receipt was broken at the end of last year. Sycamore has agreed to pay $ 11.45 per share, an 8 percent premium from the price of Thursday’s closing shares.
The chain strain signs have been clear for months. The company reported a net loss of $ 8.6 billion for the entire fiscal year 2024, nearly three times last year’s loss. But she defeated the income and expectations of income in her latest reported quarter, which ended in November.
“As we are progressing against our ambitious turning strategy, creating significant values will take time, concentration and change that is best managed as a private company,” said Tim Wentworth, chief executive of the Walgreens Boots Alliance, in a statement on Thursday.
In October, Walgreens said he planned to close about 1,200 out of more than 8,000 stores in the United States over the next three years in an effort to reduce costs and change focus. Only about 6,000 from the chain shops in the United States were profitable, said Mr. Wentworth at the time.
Walgreens’ shares increased almost 6 percent in trading after market Thursday after the sale in Sycamore was announced.
The company said it expected the deal to close in the fourth quarter of 2025. Including debt and potential payments, the total value of the agreement would increase to $ 23.7 billion.
Other major chains of American pharmacy have undergone significant restructuring in recent months. CVS and Rite AID have begun the rounds of store shutdowns in a pressure sign throughout the retail pharmacy industry. In 2023, Rite AID presented bankruptcy and announced plans to close 154 stores.
But beyond the challenges throughout the industry, analysts have attributed problems in Walgreens strategies and leadership of the company itself.
The company’s leadership has been in the influx in recent years. Mr. Wentworth joined the company in October 2023, after the pharmacy operator faced weakening of demand in its retail countries. Its previous chief executive, Rosalind Brewer, resigned after just over two years in the post. Some industry analysts have argued that chain drivers should have focused on improving the consumer experience in its stores and providing private labels for groceries and other essential items.
The Walgreens Boots Alliance was formed 10 years ago after Walgreens won the Boots Alliance, a British Pharmacy chain and a majority of drugs. At one point, the company considered selling boots to facilitate financial strain, but eventually abandoned those plans.
Sycamore, which is located in New York, focuses on consumer and retail investments, although the deal with Walgreens expands its portfolio in health care. The private capital firm bought off office retail staples for nearly $ 7 billion in 2017 and has invested in brands including Hot Tema and Ann Taylor.
The firm may sell parts of Walgreens or work with partners as part of the purchase. Other firms have expressed interest in taking over Walgreens in the past. KKR, one of the largest private capital firms in the world, offered to buy the pharmacy chain for $ 70 billion in 2019, according to reports at the time.