Walgreens to purchase pharmacy files of 185 Fred’s pharmacies for $165M

Walgreens (WBA) and Fred’s (FRED) announced they have entered into a definitive asset purchase agreement, pursuant to which Walgreens will acquire pharmacy patient prescription files and related pharmacy inventory of 185 Fred’s stores located across 10 Southeastern states. Under the agreement, the aggregate consideration to be paid by Walgreens to Fred’s is $165M, subject to adjustment, plus an amount equal to the value of related pharmacy inventory. The transaction is part of a previously announced plan by Fred’s to unlock shareholder value by monetizing non-core assets through strategic transactions. Fred’s will continue to operate its retail stores at most of these locations after the pharmacies close. Once the transaction is complete, Fred’s will continue to operate approximately 162 pharmacies across nearly 600 stores. Fred’s pharmacy staff at the closing locations will have an opportunity to apply for any available positions at Walgreens. The transaction is subject to the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction or waiver of certain other customary closing conditions. The companies expect the file transfers to begin in 4Q18 and be completed in 1Q19.
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