Walgreens Boots Alliance Invests $5.2 Bln In VillageMD, Increases Stake To 63%

(RTTNews) - Walgreens Boots Alliance Inc. (WBA) on Thursday announced that it has agreed to pay $5.2 billion to acquire a controlling stake in primary-care network VillageMD, as the pharmacy chain seeks to advance its position in the primary care segment.

Walgreens' latest investment in VillageMD increases its stake in the company to 63 percent from 30 percent. However, VillageMD will remain a standalone company, with its own board and management, and the company plans to conduct an IPO in 2022.

VillageMD currently operates over 230 practices across 15 markets, with plans to expand nationally over time. The company has reported sharp growth in recent years, with revenues increasing from $217 million in 2017 to $1.3 billion expected in 2021.

The $5.2 billion investment will accelerate the opening of at least 600 Village Medical at Walgreens primary care practices in more than 30 U.S. markets by 2025 and 1,000 by 2027, Walgreens said in a statement. Walgreens expects its partnership with VillageMD will significantly increase access to primary care in under-served urban and rural communities.

"The best healthcare is deeply rooted in local communities, and Walgreens is committed to expanding convenient access to high-quality and affordable healthcare services to our patients and customers in our neighborhood locations," said Roz Brewer, CEO, Walgreens Boots Alliance. "VillageMD is a leader within the fast-growing, value-based primary care segment with high rates of patient satisfaction and a talented management team who share our strategic vision of the central role that primary care can serve to improve patient outcomes and lower costs."

Meanwhile, the transaction is is expected to close by the end of 2021. VillageMD's financials will be consolidated by Walgreens.