Walgreens to pay $1.4 billion to buy rest of Shields Health; leadership shakeup
Walgreens Boots Alliance is upping its investment in the fast-growing specialty pharmacy business.
In separate news, the company announced a reorganization of its U.S. business and said that John Standley has stepped down as president of Walgreens.
The drug store and pharmacy services company has entered into an agreement to buy the remaining 30% stake in specialty pharmacy company Shields Health Solutions that it doesn’t already own for an estimated $1.37 billion. The transaction, which would value Shields at about $4.6 billion, is expected to close by the end of the year.
Walgreens’ full acquisition of Shields from other equity holders (including private equity firm Welsh, Carson, Anderson & Stowe and founder and board chairman Jack Shields) follows the increase of the company’s stake to approximately 70% in September 2021 for $970 million. Walgreens
first invested in Shields Health in 2019, taking a minority stake.
In recent years, Shields has rapidly expanded its platform, serving more than 1 million specialty patients, with more than 80 health system partners representing approximately 1,000 hospitals nationwide.
“Our full acquisition of Shields will complete another major milestone as part of our consumer-centric healthcare strategy to drive sustainable long-term growth, and we are very pleased with our partnership and integration with Shields,” said Roz Brewer, CEO, WBA. “We can now make further progress on our strategy through Shields’ integrated model, increasing our value to health systems, expanding access to payor partners and supporting improved outcomes and lower costs.”
Shields will continue as a distinct business and brand within Walgreens. John Lucey, co-founder and current president of Shields, will lead the organization as CEO of Shields, and current Shields CEO Lee Cooper will take on a new executive role within Walgreens (see Leadership Changes below).
The investment is part of a wider push by Walgreens into health care. Last year, the company acquired the majority stake of VillageMD, and currently operates 120 co-located Village Medical primary-care clinics. It is looking to have at least 600 Village Medical primary care clinics at Walgreens locations in more than 30 U.S. markets by 2025, with a goal of1,000 by 2027.
In June, Walgreens introduced a clinical trial platform.
Leadership Changes
Walgreens has announced a new leadership structure for its U.S. business segment. John Standley has stepped down as president of Walgreens “to pursue other opportunities,” the company said. He has served in the role since August 2020.
The segment will now be organized under two leaders. Pharmacy will be led by Lee Cooper, CEO of Shields Health Solutions. Retail operations will be led by Tracey Brown, president of retail products and chief customer officer at Walgreens. Standley will remain at the company until Nov. 1 to ensure a smooth transition.
“We are confident that we have the right leadership in place to advance our strategic priorities and be the leading partner in reimagining healthcare,” said Brewer. “We are also very grateful to John Standley for his many contributions, and want to thank him for everything he has done for our company and wish him the very best. He led the team through a challenging time during the pandemic, and was integral to our unprecedented national rollout of COVID-19 vaccines and testing and to laying the foundation for our transformation to a healthcare company.”