Walgreens goes private in buyout deal with Sycamore Partners

DEERFIELD, Ill. — Walgreens is now officially a privately held company after being acquired by private equity firm Sycamore Partners.

If you held stock in Walgreens Boots Alliance, Inc., owner of Walgreens Co., you may have noticed that the stock was removed from the Nasdaq on Thursday, and you are wondering what happened.

On August 28, Sycamore Partners, a private equity firm based in New York that specializes in consumer, distribution and retail-related investments, announced that it had completed its acquisition of Walgreens Boots Alliance, Inc.

The deal was first announced in March, and in July, the shareholders approved the move that Sycamore said could represent a transaction of up to $23.7 billion.

As a result, Walgreens Co., the independent retail pharmacy, will now be a stand-alone private company, with Mike Motz, the former CEO of Staples US Retail, as its new chief executive.

“Today represents an exciting new chapter and a turning point for Walgreens,” said Motz. “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.”

According to Sycamore Partners, the acquisition was made in partnership with Stefano Pessina, who was executive chairman and the single largest shareholder of WBA.

“This milestone begins a new chapter for Walgreens, The Boots Group and the other portfolio businesses,” said Pessina. “Our family has proudly supported these companies for decades, and we are pleased to continue that commitment alongside Sycamore. Together, we are united in our belief in the future of these organizations and the essential role they play in millions of lives each day.”

Shareholders will receive $11.45 for each share held on the day the sale was completed and up to an additional $3 per share from any future unit sales.

In a letter to customers, Walgreens wrote:

For nearly 125 years, Walgreens has been a cornerstone in thousands of communities, helping people live healthier lives through personal care, trusted advice and accessible services. Today, we’ve entered a new chapter in our service to you—becoming a private standalone company.
You may have seen this news, and we want you to know what this means. Our stores are open, our teams are here for you and our focus remains exactly where it should be: on you.
Like any company, we have evolved and changed with the times, and today we move forward as a private organization. But throughout our 125-year legacy we have never lost sight of our true north star—caring for communities, delivering better health and serving customers. This priority has been the key to our success and will never, ever change.
As we begin this new chapter, we renew that commitment. We can do better, and we will commit every effort to living up to this promise. Over time, you will see continued investments in our team members and the overall store experience—all with the goal of better serving you. Becoming a private company gives us greater flexibility to focus on the areas that matter most to you, while staying true to the values that have guided us for generations.
We’re proud to continue being your trusted partner in care, and we look forward to serving you for many years to come. Thank you for choosing Walgreens.

However, the news about the buyout has some raising concerns about the future of Walgreens and its staff. Whether Walgreens plans to do layoffs and/or close any stores as previously announced remains unknown.

Sycamore has over 30 investments with an aggregate committed capital worth around $11 billion. Some of their investment include Ste. Michelle Wine Estates, Lane Bryant, Staples, Hot Topic, Belk and Torrid.

Walgreens was founded in 1901 and has grown to approximately 8,500 stores serving 9 million customers daily. It had been a public company for 98 years before the buyout.