Walgreens Boots Alliance on Tuesday said it will buy the remaining stake in specialty pharmacy company Shields Health Solutions for approximately $1.37 billion.
Walgreens last year spent $970 million to increase its stake in the company to 71%, according to Reuters, with the possibility of taking full ownership over the pharmacy company.
The transaction is expected to be completed by the end of the year.
“Our full acquisition of Shields will complete another major milestone as part of our consumer-centric healthcare strategy to drive sustainable long-term growth, and we are very pleased with our partnership and integration with Shields,” said Roz Brewer, CEO of WBA, in a press release. “We can now make further progress on our strategy through Shields’ integrated model, increasing our value to health systems, expanding access to payor partners and supporting improved outcomes and lower costs.”
As a specialty pharmacy, Shields offers medications with unique handling, administration and monitoring requirements. Specialty drugs are used to treat complex or rare conditions such as cancer, hepatitis and transplants. Shields currently names 30 health systems as partners, including 1,000 hospitals.
John Lucey will move from his current position as president to the role of CEO at Shields, which will continue as a distinct brand under Walgreens. Current CEO Lee Cooper will take on a new executive role within WBA. The two have worked together for a decade to develop the company, which delivered sales growth of 57% in the first nine months of the 2022 fiscal year.
“This transaction validates our tremendous impact to health systems and specialty patients, as well as the consistent growth and innovation the Shields team has achieved over the last decade,” Cooper said in a press release. “As an important business within Walgreens, and under John Lucey’s leadership, Shields will be well-positioned to continue to scale its unique integrated care model for the benefit of all stakeholders.”
Walgreens has recently moved to shift its focus toward primary care, post-acute care and home care. Earlier this month, the retail giant finalized a similar deal with CareCentrix, an at-home care platform. Last year, Walgreens invested $5.2 billion in VillageMD, making it the majority owner with a 63% stake, up from 30% previously.
These moves are mirrored by WBA’s competitor CVS, which purchased a home healthcare company, Signify Health, earlier this month.
WBA also announced leadership moves with Walgreens President John Standley exiting the company Nov. 1. His responsibilities with be divided between pharmacy, led by Cooper as the new executive vice president starting Oct. 1, and retail, led by Tracey Brown, current Walgreens Retail Products president and chief customer officer.
“In my new role leading Walgreens Pharmacy, I look forward to leveraging my deep healthcare experience to deliver transformative experiences for Walgreens patients, partners and team members,” Cooper said.
Walgreen’s WBA stock fell near a two-year low after announcing the purchase and expenditure north of a billion dollars.