Walgreens Boots Alliance (WBA), a retail pharmacy company, acquired a 63% stake in VillageMD, a value-based care platform, for $5.2 billion. VillageMD remains a standalone company with its own board and management, and the company plans to conduct an IPO in 2022.
VillageMD currently operates over 230 practices across 15 markets, with plans to expand nationally over time. The company has experienced rapid growth, growing revenues from $217 million in 2017 to $1.3 billion expected in 2021.
Sidley Austin acted as lead legal advisor for WBA, along with Weil, Gotshal & Manges. Latham & Watkins acted as lead legal advisor for VillageMD.
Walgreens also acquired CareCentrix, an post-acute care and care coordination technology platform, for $330 million. The investment of $330 million gives WBA approximately 55% ownership of CareCentrix at an $800 million enterprise valuation, with an option to acquire the remaining equity interests in the future.
Walgreens also announced the launch of Walgreens Health, a technology-enabled consumer-centric healthcare model powered by healthcare platforms VillageMD and CareCentrix.
Walgreens said investments in VillageMD and CareCentrix will accelerate Walgreens Health’s capabilities in the primary care and post-acute care continuum, especially for high-risk patients with chronic conditions.
These acquisitions will build upon the newly launched physical and digital Walgreens Health Corners, which provide in-person and virtual clinical and non-clinical services from licensed health advisors, Walgreens said.
“I am pleased to announce WBA’s new strategy to transform our core businesses, focus our portfolio and launch our next growth engine of consumer-centric healthcare solutions, enabled by a high-performance culture and winning team,” said Roz Brewer, Chief Executive Officer, Walgreens Boots Alliance.
“Our strategy leverages an ecosystem including our trusted brands, exceptional assets, healthcare expertise, and scale, integrated with a range of new talent, capabilities, resources and an intensified focus on operational excellence to drive long-term sustainable profit growth.”
One hundred thirty-six (136)) digital health companies were acquired in the first half of 2021 compared to 83 in 1H 2020.