The company also said it suspended the balance of its $3 billion share repurchase plan to fund its Rite Aid acquisition. Joseph Agnese, an analyst at S&P Capital IQ, likes the deal and raised his expectations for Walgreens stock but also said the company will likely have to unload a few stores to gain regulatory approval. “Walgreens Boots Alliance, Inc., is based in Deerfield, Illinois”.
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Same-store sales in the company’s US pharmacy business – a key retail metric – rose 6.5 percent in the fourth quarter and 6.4 percent for the year ended August 31, driven by filling more prescriptions.
Walgreens expects to fund the deal through a combination of existing cash, assumption of existing Rite Aid debt and issuance of new debt. Walgreens Boots Alliance Inc (NASDAQ:WBA) has risen 1.68% since March 24, 2015 and is uptrending.
The deal comes less than year after Walgreens bought European health and beauty retailer Alliance Boots. Names such as USA Drugs, Kerr Drug and Duane Reade were recently welcomed under the Walgreen umbrella, which allowed the corporation to own around 8,200 stores and bank $76 billion a year ago.
Alliance Boots leader Stefano Pessina, a driving force behind that deal, took over as CEO of the combined company in July. A Walgreens spokesman declined to comment. Rite Aid itself purchased EnvisionRx, a pharmacy-benefits manager, in June for about $2 billion and “scooped up two of its smaller drugstore rivals, Eckerd and Brooks”, in 2006, Sarah Halzack reports for the Washington Post.
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UBS Investment Bank acted as Walgreens Boots Alliance’s financial adviser with Simpson Thacher & Bartlett and Weil, Gotshal & Manges acting as its legal counsel.
