Walgreens Boots Could Go Private In Potentially Largest Buyout Ever

Walgreens Boots Alliance could be going private in what would be the largest leveraged purchase of a company ever, according to a report by Bloomberg.

The company has been talking to KKR, and the potential move is being spearheaded by Alliance CEO Stefano Pessina, who is the company’s biggest shareholder with about a 16 percent stake.

The company, which is based in Deerfield, Illinois, has a $55 billion market value and around $16.8 billion in debt. The previous largest leveraged buyout was the 2007 sale of TXU Corp. to KKR and TPG; that deal was worth around $45 billion, with debt.

Some buyout firms said they weren’t sure whether the buyout was even possible and were wary about participating. The news helped to boost stock in Walgreens Boots by 3.1 percent to $61.52 as of Tuesday afternoon (Nov. 5).

There has been a lot of consolidation in the healthcare space lately, in attempts to speed up sector growth. For example, CVS recently purchased health insurance company Aetna for $70 billion.

Pessina previously ran a company called Alliance Boots, which he got from KKR more than a decade ago. In 2014, he became CEO of Walgreens Boots after Walgreens acquired the piece of Alliance Boots it didn’t own for around $15.3 billion. The two-step merger, launched in 2012, was meant to create the world’s first global, pharmacy-led health and wellness company.

Walgreens Boots Alliance oversees Duane Reade and Walgreens stores in the U.S. and Boots stores in Asia and Europe. The company is the biggest retail pharmacy in both the U.S. and Europe, with upwards of 18,750 stores in 11 countries. Its wholesale division has more than 400 distribution centers, which deliver to over 240,000 health centers, hospitals and pharmacies.

The company previously tried to buy Rival Rite Aid Corp., but in 2017 the merger was jettisoned over regulatory concerns that it could potentially hurt competition in the U.S. Instead, the firm bought about 2,000 Rite Aid stores.