Acquisition Includes USA Drug, Super D Drug, May's Drug, Med-X and Drug Warehouse Stores located in Arkansas, Kansas, Mississippi, Missouri, New Jersey, Oklahoma and Tennessee
Already the largest pharmacy chain in the U.S., Walgreen Co. today announced a deal to buy a 144-store pharmacy chain from privately held Stephen L. LaFrance Holdings, and members of the LaFrance family, for approximately $438 million.
The stores are located across seven states, the majority in the south, and operate under the brands USA Drug, Super D Drug, May’s Drug, Med-X and Drug Warehouse. The deal includes corporate offices, a distribution center located in Pine Bluff, AR, and a wholesale and private brand business. The chain recorded sales of $825 million in 2011.
The acquisition agreement comes just two weeks after Walgreens announced plans to expand internationally by buying a 45 % share of the Alliance Boots drugstore chain in Great Britain for $6.7 billion.
The pair of acquisitions are the largest moves by the retailer to expand its store count since 2010 when it acquired the Duane Reade drugstore chain in New York for $1.2 billion.
Last year, Walgreens picked up the drugstore.com operation for $429 million leading to some speculation that the retailer planned to focus more on online sales.
Walgreens President and CEO Greg Wasson said the LaFrance acquisition will provide significant new pharmacy business in the region while enabling the retailer to expand into smaller communities.
Pharmacist Stephen LaFrance started his drug store business in 1968 with a single USA Drug store in Pine Bluff, AR. In 1997, with only 15 stores, he grew his business by buying the much larger Super D, a chain with about 100 stores.
"I have loved every minute of my career these past 44 years, beginning as a pharmacist, then management and currently as owner and chairman," LaFrance said in a statement announcing the agreement. "From the bottom of my heart, I would like to thank everyone who has been a part of my success: from my vendors, bankers, partners, employees, family and most importantly to my customers. Without them, none of what I have accomplished would have been possible."
The transaction is structured as a purchase of the stock of Arkansas-based Stephen L. LaFrance Holdings, Inc., which owns most of the acquired business, and also includes the purchase of assets or stock of certain affiliated companies or stores and other parts of the business that are not owned by that holding company.
The acquired drugstores will continue in the near term to operate under their current brand names after the transaction closes, with decisions to be made over time on integrating Walgreens and the acquired brands.
With 2011 sales of $72 billion, Walgreens operates 7,890 drugstores in all 50 states, the District of Columbia and Puerto Rico.