DEERFIELD, Ill. — The private equity firm that bought Walgreens in a roughly $10 billion transaction aims to double the drugstore chain’s profitability over the next few years, according to an article in Bloomberg.
Sycamore Partners is targeting earnings before interest, taxes, depreciation and amortization of about $4 billion, people familiar with the matter said, requesting anonymity because the details are private. Walgreens generated about $2 billion in EBITDA in 2024.
The goal was outlined late last year in a presentation to shareholders and some employees, the source said. The materials included potential exit strategies once the target is met, as well as the option to pay dividends if Sycamore chooses to hold the business longer.
Both Walgreens and Sycamore declined to comment on the report.
Walgreens was taken private last year after a decade-long slide in its share price. The company struggled amid intensifying competition from online sellers and big-box retailers, and as insurers reduced reimbursement rates for prescription drugs. Walgreens was once valued at more than $90 billion.
Thorvardur de Shong
Since it was acquired, Sycamore has focused on cutting costs by cutting staffing levels and eliminating paid holidays for some employees, while also seeking to lift sales by expanding product offerings, including electronic cigarettes.
Walgreens has also made progress negotiating better reimbursement rates, turning previously unprofitable GLP-1 drugs into a profit center.
Sycamore’s EBITDA target excludes earnings from businesses that were once part of Walgreens Boots Alliance Inc. but are now separate entities.
Walgreens expects adjusted EBITDA of about $2.5 billion this year on revenue exceeding $120 billion, according to a person with access to the company’s financials who asked not to be named discussing confidential information.
The company is also considering expanding into lottery ticket sales and has already secured licenses to sell tickets in Indiana, according to public records reviewed by Bloomberg.
