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Walgreens Boots Alliance to Go Private: Sycamore Partners’ $23.7 Billion Deal Explained
Mar
On March 6, 2025, Walgreens Boots Alliance (NASDAQ: WBA) announced that it has entered into a definitive agreement to be acquired by Sycamore Partners, a private equity firm known for its investments in retail, consumer, and distribution-related businesses. The transaction, valued at up to $23.7 billion, marks a significant shift for the healthcare and retail giant, positioning it for a stronger future in pharmacy-led services.
Why Is Walgreens Boots Alliance Going Private?
For over 175 years, Walgreens and Boots have been pillars in the healthcare and retail space, serving millions of customers globally. However, the industry has become increasingly competitive and complex, necessitating a strategic shift.
Tim Wentworth, CEO of WBA, emphasized that while the company’s turnaround strategy is progressing, achieving meaningful value creation requires focus, time, and strategic transformation—something that can be more effectively 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.”
— Tim Wentworth, CEO, Walgreens Boots Alliance
This move allows WBA to streamline its operations, focus on growth and innovation, and adapt more effectively to industry changes without the pressures of public market scrutiny.
Transaction Details: What WBA Shareholders Need to Know
The acquisition deal provides WBA shareholders with two key benefits:
- $11.45 per share in cash at closing
- One “Divested Asset Proceed Right” (DAP Right) per share, allowing shareholders to receive up to $3.00 per share from the future sale of WBA’s stake in VillageMD, Summit Health, and CityMD
These terms represent:
A 29% premium on WBA’s closing share price before initial reports of the transaction
A potential 63% premium when factoring in the full DAP Right value
What Are the DAP Rights?
The Divested Asset Proceed Rights (DAP Rights) give WBA shareholders the potential to earn additional proceeds from the monetization of WBA’s stake in VillageMD and related businesses. However, there are no guarantees on the timing or total value of these payouts.
Important facts about the DAP Rights:
- WBA expects to sell VillageMD’s assets to pay off $3.4 billion in debt
- 70% of net proceeds from these sales will be distributed to DAP Right holders
- The maximum payout is $3.00 per share, but it depends on how much VillageMD assets ultimately sell for
How Will the Acquisition Affect Walgreens and Boots?
Despite the ownership change, Walgreens Boots Alliance will continue to operate under its existing brands:
- Walgreens (U.S.)
- Boots (U.K.)
- Duane Reade
- No7 Beauty Company
- Benavides
Additionally, headquarters will remain in the Chicago area, ensuring that the company continues its long-standing contributions to local communities.
“This transaction reflects our confidence in WBA’s pharmacy-led model and essential role in driving better outcomes for patients, customers, and communities.”
— Stefan Kaluzny, Managing Director, Sycamore Partners
Want to learn more about Walgreens Boots Alliance’s future plans? Read on as we explore:
– Regulatory approvals and deal timeline
– Impacts on employees and consumers
– The potential for new strategic growth
See more news at: Zyphortee
