Retail News Breaks Archives
Walgreens, Omnicare exchange businesses
September 3rd, 2010
DEERFIELD, Ill. and COVINGTON, Ky. – In a two-pronged transaction, Walgreen Co. plans to sell its long-term care business to Ominicare Inc. and in exchange acquire Omnicare's home infusion business.
Under the deal announced Friday morning, Walgreens said it will acquire substantially all of the assets of Omnicare's six home infusion locations in Maryland, Nevada, Virginia, Pennsylvania and California, along with one compounding pharmacy location in Nevada and one home care management location in Maryland. Meanwhile, Omnicare will acquire essentially all of the assets of Walgreens long-term care pharmacy locations in Colorado, Texas, Florida, Georgia and Maryland.
Financial terms of the agreement weren't disclosed. The companies said they expect the transaction to close before Nov. 15, pending regulatory approvals and other conditions.
Walgreens said it's exiting the long-term care pharmacy arena after deciding that on a stand-alone basis its business lacked the necessary scale to grow to a leading position in the market without significant additional investment.
"By divesting our long-term care pharmacy business, we are able to have a stronger focus on our overall growth strategy while taking advantage of a specific opportunity to grow our infusion services," Walgreens president and chief executive officer Greg Wasson said in a statement.
"Acquiring Omnicare's infusion business allows us to expand into currently underserved markets, while also strengthening our position in existing markets," Wasson explained. "As the nation's largest provider of home infusion services, we are well-positioned to support the rapidly expanding specialty drug pipeline that requires infusion."
According to Omnicare, the deal will enable the company to sharpen its focus on and expand its core business. The Covington, Ky.-based provider of pharmaceutical care for the elderly serves residents in long-term care facilities, chronic care and other settings, encompassing about 1.4 million beds in 47 states, the District of Columbia and Canada.
"We are pleased with this transaction, as it allows us to redeploy our resources toward a growth opportunity that better leverages our core competencies and further expands our presence in the growing senior care market," stated Omnicare interim president and CEO James Shelton. "We look forward to welcoming Walgreens' long-term care pharmacy customers onto the Omnicare platform. As Omnicare customers, they will have access to an enhanced range of services that supports improving health outcomes for the residents they serve."
The agreement with Omnicare marks Walgreens' second acquisition deal in the past couple of days. On Wednesday, the drug store chain unveiled a deal to acquire 18 ApothecaryRx pharmacies from Graymark Healthcare Inc.
Also this year, Walgreens announced deals to acquire 17 drug stores from USA Drug, the metropolitan New York chain Duane Reade (more than 250 stores), three stores and the prescription files of 11 other stores from Farmacias El Amal in Puerto Rico, and Snyders Drug Stores' 25 company-owned stores in Minnesota from Katz Group.
In March, Walgreens said it was realigning its health care businesses. Among other moves in the reorganization, the company shifted its long-term care and infusion pharmacy services — along with its specialty pharmacy, mail-service pharmacy, medical campus pharmacies and home care services — from the Walgreens Health Services Division to the Pharmacy Division, led by executive vice president Kermit Crawford.
As of the end of August, Walgreens operated 8,053 locations in all 50 states, the District of Columbia, Puerto Rico and Guam, including 7,563 drug stores, work-site health centers and home care facilities, as well as specialty, institutional and mail-service pharmacies. The company also has more than 700 Take Care Clinic health centers.