Walgreens Boots Alliance, an international drugstore chain, is mulling over going private in what can signify the biggest leveraged takeover in history, as said by sources. One of the companies seeking to seal a contract is KKR, as stated by the resources. There’s a history of KKR with the company. Alliance Boots was purchased by it in 2007 in association with the Executive Chairman of Alliance Boots at that time, Stefano Pessina, and other financiers.
KKR remained as a financier after Walgreens declared a 2-part agreement to procure Alliance Boots in 2012. As per the media reports at that moment, in 2015, by the time Walgreens procured entire Alliance Boots, KKR had increased its cash investment by approximately fourfold. An agreement for going private for Walgreens Boots Alliance would be an opportunity to get out of the public limelight. Over the last 12 Months, Walgreens’ shares have dropped around 22% as both its pharmacy and retail businesses are beleaguered.
The unsettled debt load of Walgreens, approximately $17 Billion, as per its latest regulatory filing, might further make procurement talks difficult. Several pacts to purchase retailers directed by private equity companies in recent years have caused bankruptcy, comprising Payless and Toys R Us. Those merchants found themselves constrained by debt and incapable to make the investments essential to contend amid a swiftly altering retail landscape.
Among the biggest pharmacies in the world, with around 9,300 drugstores, Walgreens is under its own stress. Customers are progressively shopping more for drugstore staples like vitamins and shampoo online. On the other end, Walgreens is functioning with Evercore, investment bank, to reflect over whether it can draw up a contract, as reported by Reuters. Also, Bloomberg and Reuters earlier issued news of a possible pact, sending stakes up more than 3%. On November 5, the stakes closed at $61.21, up 2.6%.
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