BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Walgreens Steps Up Restructuring, Will Sell Home Infusion Business

Following
This article is more than 9 years old.

Walgreens Boots Alliance (WBA) announced its first major divestiture under new leadership, signing a deal to sell a majority stake in its infusion business to private equity firm Madison Dearborn Partners.

The fate of the infusion business has been a topic of speculation in recent months as Walgreens looks to cut $1 billion in costs as part of its acquisition of European drugstore chain Alliance Boots. The home infusion business has about 4,700 employees, 89 infusion pharmacies and 110 alternate treatment sites in 40 states and is a leader in the market. 

But Walgreens Boots Alliance wants to focus more on the retail health and beauty market. Walgreens recently completed the purchase of the remaining stake in Alliance Boots that the pharmacy giant didn’t already own, triggering a new name, ticker symbol (WBA) and soon-to-be named new CEO to replace the retiring Greg Wasson. The Italian billionaire, Stefano Pessina, who became Walgreens largest individual shareholder in the Alliance Boots deal, is the interim CEO.

Financial terms of the deal with the private equity firm weren’t disclosed but Walgreens and Madison Dearborn said Walgreens Infusion Services will “become a new independent, privately-held company” with Madison Dearborn owning a “majority interest.”

Walgreens and Alliance Boots are part of a new holding company, Walgreens Boots Alliance Inc.

“This agreement will enable us to continue to strengthen the Walgreens infusion offering as part of our broad health care portfolio as we work closely with the new company, which will have a dedicated focus on this $14 billion and growing U.S. market,” said Mike Ellis, vice president, Walgreens specialty pharmacy and infusion services in a statement.

Walgreens said Paul Mastrapa, divisional vice president of Walgreens Infusion Services, will be CEO of the new privately held infusion company. “The transaction is not expected to have a material impact on the earnings per share of Walgreens Boots Alliance in fiscal year 2015,” the company said in a statement.

Wondering how Obamacare will affect your  neighborhood pharmacy? The Forbes eBook Inside Obamacare: The Fix For America’s Ailing Health Care System answers that question and more. Available now at Amazon and Apple.