Retail pharmacy giant Walgreens Boots Alliance, the target of a take-private deal by private equity firm Sycamore Partners valued at over $10bn, has reported a second-quarter loss of $2.8bn, according to a report by Forbes.
The earnings report marks the company’s first since announcing the take-private agreement with Sycamore in early March, in a deal that signals a major private equity pivot for one of the most iconic names in US retail healthcare. Walgreens’ Q2 loss was driven largely by a $3bn non-cash impairment charge related to its investment in VillageMD, the struggling physician clinic platform it had hoped would anchor a new healthcare services strategy.
Under the terms of the proposed transaction, Sycamore will acquire Walgreens’ publicly traded shares at $11.45 per share, and provide shareholders with a contingent value right (CVR) of up to $3 per share, tied to the future monetisation of Walgreens’ equity and debt interests in VillageMD, Summit Health, and CityMD.
“This takeover is more than just a buyout — it’s a strategic reset,” said one private equity advisor familiar with the matter. “Sycamore is betting it can unlock value in Walgreens by streamlining operations and re-evaluating underperforming assets like VillageMD.”
Walgreens invested more than $6bn to take a majority holding in VillageMD under former CEO Roz Brewer and planned to open up to 700 clinics nationwide across its retail footprint, a strategy that has largely now been shelved.
VillageMD sales dropped 6.2% year-over-year to $2.2bn in Q2, contributing to ongoing losses. Walgreens attributed the weakness to “lower fee-for-service and risk-based revenue” and the impact of clinic closures. The firm’s US healthcare segment as a whole continues to struggle, even as Walgreens saw growth in CareCentrix (up 6.5%) and Shields (up 29.7%).
Walgreens’ total Q2 sales rose 4.1% to $38.6, with strength in US retail pharmacy (sales up 5.3% year-on-year), driven by prescription volume and higher branded drug pricing.
For Sycamore Partners, which has a track record of investing in distressed and underperforming retail and consumer businesses, the Walgreens deal represents an opportunistic entry point to reshape a once-dominant healthcare and pharmacy chain under the flexibility of private ownership.
