Investment Firm Completes Walgreens Deal, Names New CEO
Private-equity firm Sycamore Partners Management LP has completed its roughly $10 billion acquisition of Walgreens Boots Alliance Inc. and split the holding company into five separate companies while naming a new CEO for the flagship retailer.
New York-based Sycamore announced in March it was partnering with Walgreens Executive Chairman and former boss Stefano Pessina to take over Walgreens and try to resurrect its fortunes in the retail pharmacy market while separating its healthcare services business, most notably the unprofitable Village MD primary-care venture of which it owns 53 percent. On Aug. 28, the buyers closed the transaction and said Walgreens’ former units— Walgreen Co., United Kingdom retailer The Boots Group, specialty pharmacy Shields Health Solutions, homecare provider CareCentrix as well as VillageMD—will now be run separately.
“As standalone companies under private ownership, they will build on their proud legacies to enhance the customer experience and deepen the trusted relationships they have earned with millions of customers around the world,” Stefan Kaluzny, a managing director of Sycamore, said in a statement.
Walgreens is entering its new chapter with a new leader. The Sycamore team has named Mike Motz CEO, effective immediately. Motz is well known to Sycamore: He was until now CEO of Staples US Retail, another company in Sycamore’s portfolio. He also has pharmacy experience as president of Canada’s Shoppers Drug Mart for three years last decade.
Motz replaces Tim Wentworth, who had moved into the CEO seat in the fall of 2023 after Roz Brewer left Walgreens Boots Alliance. Wentworth has been named a director of the new Walgreen Co. but has given up his executive roles. Similarly, Mary Langowski has resigned her position as executive vice president and president of Walgreens Health at Walgreens Boots Alliance.
A potential next milestone for the former Walgreens Boots Alliance is one or more transactions involving Village MD, which is home Summit Health and CityMD as well as its namesake chain of clinics. Wentworth told investors in the middle of last year that his team had begun looking to shrink the company’s stake in Village, which at the time ran more than 500 clinics in 15 markets but had fallen short of financial targets. In January, he clarified that in saying that the goal was to sell Village Medical while best options for the Summit/CityMD organization were still being evaluated.
Former shareholders of WBA are in line to receive up to $2.7 billion from any sales of Village debt or equity by its former parent company. When announcing their WBA purchase plan earlier this year, Sycamore officials said they hoped to sell at least some assets before year’s end.
About the Author
Geert De Lombaerde
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post for more than a decade and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.