Health system closes all 55 clinics located inside Walgreens stores in Illinois and Wisconsin; WBA to be acquired by private equity.
By Daniel Beaird
Advocate Health permanently closed 55 clinics located within Walgreens pharmacies in Illinois and Wisconsin in February.
It was the latest move signaling transition for the pharmacy-led retailer before Walgreens Boots Alliance (WBA) entered into a definitive agreement in March to be acquired by an entity affiliated with Sycamore Partners, a private equity firm specializing in retail, consumer and distribution-related investments.
The total value of the transaction represents up to $23.7 billion. The WBA board of directors has unanimously approved the proposed transaction. It is expected to close in the fourth quarter of calendar year 2025. Upon completion of the transaction, WBA’s common stock will no longer be listed on the Nasdaq Stock Market and WBA will become a private company.
WBA shareholders will receive total cash consideration of $11.45 per share in cash at closing of the Sycamore transaction and one non-transferable right to receive up to $3 in cash per WBA share from the future monetization of WBA’s debt and equity interests in VillageMD, which includes the Village Medical, Summit Health and CityMD businesses.
The company will continue to operate under Walgreens, Boots and its portfolio of consumer brands.
“Our trusted brands and deep commitment to our customers, patients, communities and team members have and will continue to anchor our business as we realize our goal of being the first choice for pharmacy, retail and health services,” said Tim Wentworth, CEO, Walgreens Boots Alliance, in a statement.
Once committed to making VillageMD the centerpiece of its healthcare strategy, Walgreens changed course, closing 160 VillageMD clinics in 2024 with other plans to close over 1,200 underperforming stores during the next three years. Walgreens has about 8,500 stores in the U.S. and has closed about 2,000 locations during the past decade.
The Walgreens right-sizing turnaround plan had been met with optimism by investors before the definitive agreement with private equity was announced.
“Sycamore has deep respect for WBA’s talented and dedicated team members, and we are committed to stewarding the Company’s iconic brands,” said Stefan Kaluzny, managing director of Sycamore Partners. “This transaction reflects our confidence in WBA’s pharmacy-led model and essential role in driving better outcomes for patients, customers and communities.”
Advocate pivots to investment in Chicago’s South Side
Advocate Health says closing its 55 clinics inside Walgreens will allow it to expand patient-preferred care options like virtual services, urgent care and primary care access.
The Charlotte, N.C.-based health system, which was a December 2022 merger between Midwestern health system Advocate Aurora Health and North Carolina health system Atrium Health, announced a $1 billion investment in facilities and services on Chicago’s South Side. More than $500 million will fund outpatient care expansion, including 10 new Advocate Health Neighborhood Care locations built in familiar settings like community centers and churches.
Advocate began operating Walgreens clinics in the Chicago area in 2016, saying it would strengthen overall convenience and access for patients, as well as care coordination.
But the health system saw an opportunity to shift operations with recent investments in Chicago’s South Side. That includes $300 million in land purchases and spending to build a new hospital with another $200 million invested in hospital and outpatient programs and services. These investments are aimed to address social determinants of health like expanding access to healthy foods, housing, transportation and prescription drugs.
“This allows us to focus on additional ways patients prefer to access care, when and where they need it, including expanded virtual services that provide care within the comfort of their own home, as well as convenient access to urgent care and primary care locations in the community,” Advocate said in a statement.
The Walgreens clinics were staffed by one or two medical office assistants and additional clinicians who supported virtual care operations and Advocate worked to find them alternative roles within the health system.