Reports out indicate that Walgreens Boots Alliance is considering an offer from private equity firm KKR & Co. to take the firm private. The deal, if it goes through, could represent the largest ever leveraged buyout.
Reports in Bloomberg on Monday (Nov. 11) said KKR is preparing a proposal to buy out shareholders of Walgreens Boots, according to sources close to the negotiations who asked not to be identified due to the ongoing and private nature of the conversations. It remains up in the air if such a deal is even possible, given the large amounts of funds that would need to be financed and the fact that Walgreens may take a pass on the deal in its entirety when a final offer is presented. Thus far both firms have declined to offer any public comment on the reports.
To date, Walgreens Boots has a market value of about $56 billion and $16.8 billion of debt. If bought at that price, the leveraged buyout would vastly outstrip the previous record holder — the 2007 sale of utility TXU Corp. to KKR and TPG, which was worth about $45 billion including debt, according to data compiled by Bloomberg. Walgreens Boots Chief Executive Officer Stefano Pessina has reportedly been reviewing a potential deal with a financial adviser to take the company private amid buyout interest, though given Walgreen's size and scale, some buyout firms have already taken a pass. But Walgreens and KKR have history, as the firms partnered for the Walgreens acquisition of Alliance Boots in 2007. Pessina has been at the helm of the firm since Walgreens. acquired the part of Alliance Boots that it didn’t already own for about $15.3 billion in 2014, again with the assistance of KKR.
Whether this deal will come to anything remains to be seen — but the stock market did like the news. Walgreens Boots shares rose 6.3 percent to $63.02 at 10:09 a.m in New York trading.