Walgreens Boots Alliance is reportedly considering selling itself to private equity firm Sycamore Partners and becoming private, The Wall Street Journal reported Dec. 10.
Here are five things to know:
1. The deal could be inked as early as next year if negotiations move forward, sources familiar with the matter told the Journal.
2. This decision comes amid clinic closures across multiple states. In October, Walgreens announced in its fiscal fourth-quarter earnings report that it will close 1,200 locations over the next three years. The closures include 500 in 2025, which should immediately support adjusted earnings and free cash flow. The closures also encompass 300 stores slated for shutdown under a previous cost-cutting initiative.
3. Financially, Walgreens posted a $978 million operating loss in Q4 2024 — a 117% increase year-over-year. Net losses jumped to $3 billion, compared to $180 million the year prior
4. In 2021, the company acquired a majority stake in VillageMD through a $5.2 billion deal, but it is now reconsidering that strategy — mirroring other large chains' struggle to break into primary care. According to an Aug. 7 Securities and Exchange Commission filing, Walgreens is evaluating options for VillageMD, including a potential sale of all or part of its stake, as well as restructuring alternatives.
5. Sycamore Partners specializes in retail and consumer investment. It has around $10 billion in aggregate committed capital, according to its LinkedIn page.
Both Walgreens and Sycamore Partners declined to provide Becker's with a comment.