In Walgreens Latest Divestiture, Drugstore Chain Sells $330M Stake In Infusion Business
Walgreens Boots Alliance has sold its remaining interest in home infusion service provider Option Care Health for proceeds of approximately $330 million.
“The company intends to use the proceeds primarily to pay down debt, continue to support WBA’s strategic priorities and transform it into a consumer-centric healthcare company,” Walgreens said in a statement Thursday night. “The transaction is another key move by WBA to unlock value and further simplify the company’s portfolio.”
Of course, over the past two years under CEO Roz Brewer, Walgreens has reduced its stakes in other companies to raise money for other priorities, such as its multibillion-dollar bet on pharmacy-affiliated, doctor-staffed primary care clinics.
Less than a month ago, Walgreens sold shares in AmerisourceBergen, a major drug distributor, for proceeds of $694 million. This sale of AmerisourceBergen stock was followed by another sale of the distributor’s stock last December for proceeds of $1 billion, reducing its stake in the company to less than 20%.
Meanwhile, Walgreens has spent billions of dollars growing its primary care business, using a mix of equity and debt. Most notably, Walgreens has invested in VillageMD, which last year announced plans to buy Summit Health for $8.9 billion to expand medical clinics across the country. The transaction includes investments from Walgreens, which already owns about half of VillageMD, and Cigna’s healthcare services company Evernorth.
The merger comes as Walgreens and rivals CVS Health, Walmart and Amazon are digging deeper into the delivery of health care at drugstores and other retail outlets.
Earlier this year, Amazon completed the $3.9 billion acquisition of One Medical, which operates more than 220 medical practices in more than 28 US markets. Meanwhile, CVS Health, which owns health insurer Aetna, has gone into business of its own. CVS bought home-care company Signify Health for $8 billion and last month completed its acquisition of Oak Street Health for $10.6 billion in cash, adding a large network of clinics with physicians who mainly used by seniors.
Other health insurers, like UnitedHealth Group, have long gobbled up doctor’s offices and other primary care operations, including emergency care and surgery centers, through its Optum healthcare services business. And Walmart has opened several new “Walmart Health” centers with physicians in several states, doubling the number of such facilities to around 80 by the end of next year.
Option Care Health, known as Walgreens Infusion Services until 2015, recently attempted to buy home care and hospice company Amedisys for more than $3 billion. That deal, however, faced competition earlier this week when UnitedHealth’s Optum made an unsolicited cash takeover bid for Amedisys.
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