Walgreens has completed its transition to become a private company, it announced Aug. 28.
Sycamore Partners completed its acquisition of Walgreens the same day. As a result, Walgreens is now operating as a private company.
The retail pharmacy chain had announced in March that it had entered a definitive agreement for Sycamore Partners to acquire it. Walgreens had a 35-day “go-shop” period in which it could evaluate and enter into negotiations with parties offering alternative proposals.
To finance the deal, billionaire Stefano Pessina and his family have partnered with Sycamore to acquire Walgreens. Pessina and his family have also “reinvested 100% of their interests in Walgreens,” the parties said in a statement.
“I believe strongly in the business and its significant impact on the communities it serves,” Pessina said in the announcement. “My family and I are pleased to support its continued evolution as we embark on this next chapter. I want to thank the leadership team for stabilizing the business and providing a strong foundation upon which we will build to reach new heights.”
Walgreens has about 12,500 retail locations across the U.S., Latin America and Europe. It also employs about 311,000 people across eight countries under the brands Walgreens, Boots, Duane Reade, No7 Beauty Company and Benavides.
Who is the new Walgreens CEO?
Walgreens’ new corporate owners have also appointed Mike Motz as the Walgreens CEO. Motze was previously the CEO of Staples in the United States, a company in Sycamore’s portfolio. Before that, he was president of Shoppers Drug Mart, a Canadian pharmacy chain.
Prior to the acquisition, Walgreens ranked No. 14 in the Top 2000 Database. Loblaw Companies Limited, which acquired Shoppers Drug Mart in 2014, ranks No. 33. The Top 2000 tracks North America’s largest online retailers based on their annual ecommerce sales.
In a statement, Sycamore Partners referred to Motz as “a seasoned leader” who brings “significant operational discipline to guide Walgreens.”
“As a private organization, alongside our dedicated team members, we are renewing our focus on our core pharmacy and retail platform, our stores and our customer experience — building on the progress that’s been made,” Motz said in the announcement.
He replaces Tim Wentworth, who will continue serving as a director on the company’s board. John Lederer, a former Walgreens Boots Alliance director and a senior advisor to Sycamore, is now executive chairman of Walgreens.
“Walgreens benefits millions of Americans, and I am confident that, enhanced by the flexibility of operating as a private standalone organization, it can move with certainty, speed and focus to deliver meaningful value to its customers,” said Stefan Kaluzny, managing director of Sycamore, in the announcement.
Walgreens’ last quarterly earnings as a public company
In its final quarterly earnings report as a public company, Walgreens had reported a 7% year-over-year sales increase to $39.0 billion in its fiscal Q3, which ended May 31.
The company said comparable sales for its U.S. Retail Pharmacy segment — which includes ecommerce sales — were up 10.3% from the same quarter a year ago. However, comparable retail sales declined 2.4% from a year earlier. The retailer cited lower sales in the grocery and household, health and wellness, and beauty categories.
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