Sycamore Partners Takes Walgreens Private, Names Staples Veteran Mike Motz CEO

Private-equity firm Sycamore Partners on 28 August closed its roughly $10 billion cash acquisition of Walgreens Boots Alliance, taking the 124-year-old pharmacy chain off public markets and ending its run in major equity indices. The deal, valued at up to $23.7 billion including debt, leaves Walgreens as a privately held company for the first time in decades. Shareholders are receiving $11.45 in cash for each Walgreens share and may collect up to an additional $3 per share tied to proceeds from future divestitures of health-care assets such as VillageMD. The headquarters will remain in Deerfield, Illinois, while Walgreens, Boots Group, Shields Health Solutions, CareCentrix and VillageMD will operate as independent, standalone businesses under Sycamore’s ownership. Sycamore installed retail veteran Mike Motz—formerly chief executive of Staples’ U.S. retail arm and president of Shoppers Drug Mart—as chief executive of Walgreens. He replaces Tim Wentworth, who remains on the board. John Lederer, a senior adviser to Sycamore and past Walgreens Boots Alliance director, has become executive chairman. Long-time chairman Stefano Pessina and his family rolled their entire equity stake into the new structure. Management says operating outside the scrutiny of public markets will help the chain refocus on core pharmacy and retail operations as it confronts shrinking prescription reimbursements, rising costs and a previously announced plan to close 1,200 of its roughly 8,500 U.S. stores over three years. Walgreens employs about 220,000 people across the United States and Puerto Rico.