Madison Dearborn Partners acquires majority interest in Walgreens Infusion Services
DEERFIELD, Ill. — Walgreens on Tuesday announced that it has signed a definitive agreement with Madison Dearborn Partners, a leading private equity firm based in Chicago, under which MDP will acquire a majority interest in Walgreens Infusion Services.
“This agreement will enable us to continue to strengthen the Walgreens infusion offering as part of our broad health care portfolio as we work closely with the new company, which will have a dedicated focus on this $14 billion and growing U.S. market,” stated Mike Ellis, VP Walgreens specialty pharmacy and infusion services. “With Walgreens and MDP’s expertise, capabilities and resources, the new company will have an opportunity to play an even greater role in improving the quality and cost of infusion services.”
When the transaction closes, Walgreens Infusion Services will become a new independent, privately-held company. MDP will own a majority interest in the new company. Walgreens Boots Alliance will own a significant minority interest and have representatives on the company’s board of directors.
The transaction supports Walgreens focus on accelerating its core retail and specialty offerings. Walgreens Infusion Services will receive the additional investment and focused support it needs to continue to grow, while also benefiting from Walgreens Boots Alliance purchasing efficiencies.
Paul Mastrapa, current divisional VP of Walgreens Infusion Services, will serve as the new company’s CEO. Financial terms of the agreement were not disclosed. The transaction is not expected to have a material impact on the earnings per share of Walgreens Boots Alliance in fiscal year 2015.
“The new company, which will have an industry-leading management team supported by MDP and Walgreens, will be positioned to provide even greater value to patients, local health systems, health plans and pharmaceutical manufacturers,” said Mastrapa.
“MDP looks forward to our business relationship with Walgreens, and we are confident the new company is well positioned to continue to grow in the alternate-site infusion services industry,” said Tim Sullivan, managing director, Madison Dearborn Partners. “Working in close collaboration with Paul Mastrapa and his team, and also with Walgreens, we plan to invest in additional resources and new technology to enhance the company’s preeminent capabilities as an alternate site provider of critical health care services.”
Walgreens Infusion Services’ geographic footprint includes 89 infusion pharmacies and 110 alternate treatment sites in 40 states, approximately 4,700 employees and the ability to serve more than 90% of the U.S. population. Its clinical personnel, including nurses, pharmacists, technicians and dieticians, treat patients who are managing a broad range of acute and chronic conditions.
The transaction is subject to satisfaction of regulatory requirements and other conditions and is expected to close during the second quarter of calendar year 2015.
In connection with the transaction, BofA Merrill Lynch acted as financial advisor and Sidley Austin acted as legal advisor to Walgreens, and Weil, Gotshal & Manges provided antitrust counsel. MDP was advised by Barclays, Deutsche Bank and Goldman Sachs. Kirkland & Ellis acted as legal advisor to MDP and Ropes & Gray provided regulatory counsel. BofA Merrill Lynch will lead the first lien financing and Goldman Sachs Mezzanine fund is providing the second lien notes.