Bankrupt Rite Aid to divest most of Health Dialog assets
Rite Aid Corp. is selling a majority of its Health Dialog healthcare patient support, analytics and decision support platform.
The drugstore retailer, which filed for Chapter 11 bankruptcy protection in October 2023, is entering into an asset purchase agreement for the partial sale of its Health Dialog business to Carenet Health, a provider of healthcare engagement, clinical support, telehealth and advocacy solutions, for an undisclosed sum.
Rite Aid initially purchased Health Dialog in 2014 to help support Rite Aid Health Alliance, a health management collaboration it launched among various healthcare providers to provide comprehensive care and support to individuals with chronic and poly-chronic health conditions.
Health Dialog provides personalized health solutions with the goals of improving the health of members while reducing overall medical costs. Under the terms of the agreement, Carenet will acquire Health Dialog’s Nurse Advice Line, Chronic Care Management solution and Shared Decision-Making solution, along with client contracts associated with those services.
However, Health Dialog’s Medication Adherence Management and Medication Therapy Management solutions are not included in the proposed transaction. Rite Aid is integrating these into its clinical offerings. Rite Aid is also divesting its Elixir Solutions pharmacy benefits and services subsidiary as part of its Chapter 11 activities.
"This transaction, combined with our recent divestiture of Elixir Solutions, underscores our commitment to aligning Rite Aid’s portfolio around the key healthcare products, services and solutions that are core to our future," said Jeffrey S. Stein, CEO and chief restructuring officer, Rite Aid. "As we move through the restructuring process, we are making important progress executing on our growth and profitability initiatives and implementing our go-forward business plan, focused on creating a portfolio of high-performing stores, a leaner supply chain and a more efficient operating model."
The transaction, which is subject to bankruptcy court approval and customary closing conditions, is expected to close early in the second quarter of 2024. Kirkland & Ellis LLP is serving as legal advisor, Guggenheim Securities is serving as investment banker, and Alvarez & Marsal is serving as transformation officer and financial advisor.
Other steps Rite Aid is taking to reduce expenses in the wake of filing for bankruptcy include the planned closure of 77 stores nationwide, including over 20 in California (see a list of the 77 stores here). These planned closures bring the total number of locations Rite Aid has set to shutter since it filed for bankruptcy to 431, reported MassLive.
As of Feb. 29, Rite Aid operated 1,704 stores across the United States, according to its website.