Walgreens Boots Alliance Inc., managed by Chief Executive Officer Stefano Pessina, has been reviewing a possible deal to take the corporate private in what might become the biggest leveraged buyout in history, individuals accustomed to the matter stated.
The corporate has lately held casual talks with private equity corporations together with KKR & Co., the people stated, asking not to be recognized because the data is private. Pessina is Walgreens Boots’s largest shareholder with a stake of about 16%, according to information compiled by Bloomberg.
Deerfield, Illinois-based Walgreens Boots has a market worth of about $55 billion and $16.8 billion of debts. At that dimension, a take-private of the corporate would top the biggest leveraged buyout in history: the 2007 sale of utility TXU Corp. to KKR & Co. and TPG, which was price about $45 billion together with debt, according to information compiled by Bloomberg.
A few of the buyout companies have so far shown reluctance to take part in a deal, the individuals mentioned. It’s unclear how feasible the transaction can be, and the corporate might resolve against pursuing the concept, the individuals stated.
Representatives for Walgreens Boots and KKR declined to comment. Walgreens Boots rose 3.1% to $61.52 at 3:38 p.m. in New York trading. Its bonds dropped the most ever.
A buyout would give Walgreens Boots time to adapt to a fast-changing retail landscape, free from the quarter-by-quarter demands of public shareholders.
The corporate is under immense stress from on-line opponents together with Amazon.com Inc., which have chipped away at front-of-the-store gross sales of household and beauty items. Whereas top rival CVS Health Corp. has grown right into a vertically integrated health-care giant, Walgreens Boots has doubled down on retail, saying pilot partnerships with retailers together with grocer Kroger Co.
It has additionally introduced an ambitious $1.8 billion in annual value cuts and plans to shutter its in-store health clinics. This wouldn’t be Pessina’s first ambitious private equity deal.