Walgreens Boots Alliance may sell Boots pharmacies in the UK as its new company … [+]
Walgreens Boots Alliance may once again look to sell or spin off Boots’ UK pharmacies as the company’s new chief executive reviews the company’s business and faces a more urgent need to cut debt.
Last year, former Walgreens chief executive Roz Brewer scrapped plans to sell more than 2,000 Boots pharmacies, citing “Market volatility is seriously affecting availability funding’ for third parties interested in Boots and No7 Beauty Company. “Consequently, the WBA has decided that it is in the best interests of shareholders to continue to focus on the further growth and profitability of the two businesses.” Walgreens said last June.
Now, Walgreens has a new chief executive in Tim Wentworth, who seems interested in offloading Boots through a sale. A Bloomberg report also said Walgreens is considering an initial public offering of Boots in London.
Meanwhile, sources close to Walgreens say the new top executive, who joined Walgreens less than two months ago, is not interested in operating businesses outside the US and is focused solely on growing the US healthcare services business.
Wentworth has more than 30 years of experience in the healthcare industry, He most recently served as CEO of Evernorth, Cigna’s $100 billion health services business, which includes Express Scripts, the large pharmacy benefit management company. Wentworth was CEO of Express Scripts when the PBM sold to Cigna for $54 billion.
Reports of another attempt to sell or spin off Boots come in the same week Walgreens was hit with its senior unsecured credit rating cut to junk by Moody’s Investors Service. The rating agency cited Walgreens’ high debt relative to earnings and risks surrounding its strategy to offer more health care services.
But Walgreens has reduced its debt this year and plans to reduce its debt next year, even as it spends billions of dollars investing in VillageMD, the primary care company that partners with Walgreens to attach medically-staffed clinics next to its pharmacies.
Boots pharmacies are valued at between $8 billion and $9 billion, according to Bloomberg report.
