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Walgreens in pharmacy file deal with Fred’s

Walgreens will be purchasing the pharmacy patient files and related pharmacy inventory from 185 Fred’s stores in the southeastern United States, the two companies announced Monday.

The deal will see Walgreens paying an aggregate consideration of $165 million to the Memphis-based Fred’s for the files, subject to adjustment plus an amount equal to the value of the pharmacy inventory. Fred’s said that once the transaction is complete, it will still operate roughly 162 pharmacies across its approximate 600 stores.

“This agreement increases patient access to Walgreens pharmacies in the Southeastern United States and allows us to introduce more people to Walgreens trusted pharmacy services in these communities,” Walgreens president of operations Richard Ashworth said. “We look forward to welcoming Fred’s patients and team members who are hired into available Walgreens positions.”

The move comes as Fred’s — which announced it was shopping it retail pharmacy business in May — said it is looking to and monetize non-core assets in an effort to build shareholder value. Fred’s pharmacy staff at the closing locations will have an opportunity to apply for any available position at Walgreens, the companies said.

“With this agreement, we have taken a major step towards achieving one of our main goals of eliminating our debt balance,” said Joe Anto, interim CEO and CFO of Fred’s. “We look forward to partnering with Walgreens to transition our pharmacy patients in these locations as smoothly as possible.”

The companies said patients whose files are being transferred will receive a letter notifying them, and that they would work to make the transition smooth. Once the transition is complete, Walgreens said patients will have access to its pharmacy services across its roughly 9,800 pharmacies nationwide.

PJ Solomon is acting as exclusive financial advisor to Fred’s on the transaction.
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