Goldman Sachs Group is among a select group of major Wall Street banks preparing to provide $4.25bn in debt to support Sycamore Partners’ acquisition of UK pharmacy chain Boots, a key component of the private equity firm’s $12.5bn buyout of Walgreens Boots Alliance, according to a report by Bloomberg.
Sources close to the matter, who requested anonymity due to the confidential nature of the discussions, revealed that the banks recently convened to strategise the marketing of a bond and loan package to potential investors. The group is eyeing a June or July timeline for the transaction.
Other major banks involved in the deal include Citigroup, Deutsche Bank, JPMorgan Chase & Co, UBS Group, and Wells Fargo & Co.
This development comes at a time when markets are stabilising following the uncertainty caused by US President Donald Trump’s tariff hikes, which had previously stalled several transactions and left banks holding more than $4bn in unsold debt.
However, recent signs of market recovery have reignited activity, with junk-bond sales making a comeback on both sides of the Atlantic. Notably, a European high-yield issuer this week successfully increased the size of its bond offering nearly twofold during pricing.
Further tests of market appetite are expected with the upcoming issuance of €2.5bn in high-yield bonds for Flutter Entertainment Plc’s acquisition of Playtech’s Italian gambling business, a $1.7bn debt package for OSTTRA’s acquisition, and a $2bn offering to support Silver Lake Management’s investment in chipmaker Altera.
Given the dampened pace of M&A activity, the Walgreens debt offering is anticipated to attract strong interest from investors, with the possibility of marketing a portion of the debt to private credit funds. The structure of the deal may offer flexibility on the allocation between leveraged loans and high-yield bonds, as well as the currency denomination, sources noted.
Private credit firms have been eager to deploy capital, with KKR tapping direct lenders for its acquisition of Karo Healthcare and Apollo Global Management and Blackstone joining forces to provide a $4bn loan to back Thoma Bravo’s acquisition of Boeing Co.’s flight navigation unit and related digital assets.
