Retail News Breaks
Walgreens in deal to form new work-site health firm
April 3rd, 2014
DEERFIELD, Ill. – Walgreen Co. is selling a majority stake in its Take Care Employer Solutions subsidiary to Water Street Healthcare Partners as part of a deal that will create a new work-site health services company.
Take Care Employer Solutions manages more than 360 workplace health centers nationwide.
Walgreens said Thursday that under the arrangement, Water Street will acquire a majority interest in Take Care Employer Solutions, which manages over 360 workplace health centers nationwide.
In addition, Water Street plans to invest in CHS Health Services, which has more than 130 work-site health centers, and then merge Take Care Employer Solutions and CHS to form a new employee health care company.
Water Street will own a majority interest in the new company, and Walgreens will own a significant minority interest and have representatives on the new company's board, the drug chain reported.
"Walgreens, CHS and Water Street share a goal of maximizing employers' return on their health care investment," Jeffrey Kang, senior vice president of health and wellness services and solutions at Walgreens, said in a statement. "This strategic decision to bring together our organizations' expertise, capabilities and resources to create a leading work-site health and wellness company provides us an opportunity to play an even greater role in improving the cost and quality of workforce health care.
"Through our continued involvement in the business and as a preferred strategic partner with Water Street, Walgreens expects to accelerate tighter connections with employers, an important stakeholder in the health care delivery system," Kang added.
The new company — the name of which will be determined during the integration process — will have more than 85 years of combined experience in employer health solutions and serve more than 200 leading corporations through nearly 500 workplace health centers nationwide, Walgreens said.
Plans call for the new company to be led by CHS chief executive officer Stuart Clark and for Trent Riley, divisional vice president of the Take Care Employer Solutions Group, to serve as chief operating officer.
"CHS and Take Care Employer Solutions are both deeply committed to finding new ways to drive positive health care outcomes for our clients and their employees," Clark stated. "This merger will provide us with a significant opportunity to transform on-site health care. Together, we will have the experience and resources to create innovative strategies that will improve patient engagement and positively impact health outcomes."
Financial terms of the deal weren't disclosed. Pending regulatory approval and other conditions, the transaction is slated to close by the middle of this year.
"We are pleased that Walgreens and CHS have selected Water Street to collaboratively and strategically grow their businesses," commented Steve Cosler, a Water Street operating partner who has over 20 years of experience in outsourced health care. "We will leverage our team's experience and network of relationships in health care services to expand the new company's capabilities and create greater long-term value for the business and clients."
Walgreens added that it will continue to manage its current work-site pharmacies in tandem with the new company. The drug chain's Healthcare Clinic arm, with more than 400 in-store clinics that formerly operated under the Take Care Clinic name, isn't a part of the transaction and will continue to be managed by Walgreens.
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