Walgreens signs $10 billion deal to be taken private by Sycamore Partners
Walgreens is officially leaving Wall Street.
Shares of the beleaguered pharmacy chain leapt nearly 8% Friday morning, cruising toward the agreed-upon takeover price of $11.45, after the company agreed to be sold to private equity firm Sycamore for $10 billion.
Stocks typically rise to just under the deal price once a merger deal is official, pricing in a bit of risk in case something derails the process. In this case, shareholders will also get up to an additional $3 a share in cash depending on how much certain Walgreens assets get sold for in the future.
According to The Wall Street Journal, the firm is expected to sell off parts of Walgreens’ business or partner with others to support a turnaround. The deal, set to close in Q4 of this year, values Walgreens at a fraction of its 2015 peak. Including debt and potential future payouts, the transaction is valued at nearly $24 billion, making it one of the largest leveraged buyouts of the past decade.
Stocks typically rise to just under the deal price once a merger deal is official, pricing in a bit of risk in case something derails the process. In this case, shareholders will also get up to an additional $3 a share in cash depending on how much certain Walgreens assets get sold for in the future.
According to The Wall Street Journal, the firm is expected to sell off parts of Walgreens’ business or partner with others to support a turnaround. The deal, set to close in Q4 of this year, values Walgreens at a fraction of its 2015 peak. Including debt and potential future payouts, the transaction is valued at nearly $24 billion, making it one of the largest leveraged buyouts of the past decade.
