Walgreens inventory climbs on Sycamore Companions deal report

Actions of Walgreens jumped about 20% on Tuesday on a report that the corporate is in talks to promote itself to non-public fairness agency Sycamore Companions.

Walgreens and Sycamore have mentioned a deal that might shut early subsequent 12 months, The Wall Avenue Journal reported, citing individuals aware of the matter. New York-based Sycamore would seemingly promote elements of Walgreens’ enterprise or work with companions, the Journal reported.

A Walgreens spokesperson declined to touch upon the reported talks.

The report comes throughout a troublesome time for the retail pharmacy big. The corporate’s shares have been down greater than 60% for the 12 months earlier than their rise Tuesday.

Walgreens — crushed by transition out of the Covid pandemicA leadership shakeuppharmacy reimbursement headwinds and its shaky progress in well being care – underperformed Wall Avenue earnings expectations for two consecutive quarters. Walgreens’ pharmaceutical enterprise particularly has been waving on account of declining reimbursement charges for prescribed drugs and several other elements placing strain on the storefront, reminiscent of inflation and elevated competitors.

The corporate is attempting to regain its footing with a brand new CEO, healthcare business veteran Tim Wentworth. Since taking workplace in October 2023, Wentworth has moved to chop prices at Walgreens.

In October, Walgreens introduced plans to close around 1,200 of its pharmacies over the subsequent three years, together with 500 in fiscal 2025 alone. Walgreens has about 8,700 areas in america, 1 / 4 of that are unprofitable, she stated. The corporate additionally diminished its presence within the main care sector by lowering its stake in main care supplier VillageMD.

Walgreens has reportedly been seen prior to now as a possible non-public fairness goal.

In 2019, non-public fairness agency KKR made roughly $70 billion buyout supply to the corporate, the Monetary Occasions and Bloomberg reported on the time.