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Walgreens' Takeover of DaVita Rx's Prescription-Drug Unit Results in Layoffs, Shedding of Real Estate

Takeover is Slated to Happen in Mid-September
August 6, 2018
Prescription drug company DaVita Rx, which has a major operations center in Coppell, TX, said it plans to lay off 869 employees in September following Walgreens' takeover of the company's prescription-drug unit that's focused on prescriptions for kidney disease medication.

Walgreens agreed to purchase DaVita Rx, a pharmacy owned by DaVita Inc., for the division's non-dialysis-related prescription files that are billed as a pharmacy benefit, most likely under Medicare Part D. The agreement led to the layoff announcement and could impact DaVita's real estate footprint in Coppell.

DaVita leases 135,200 square feet of industrial space at 1234 Lakeshore Drive from Dallas-based Lincoln Property Co., according to CoStar data. At the Coppell facility, DaVita employees package prescription drugs to distribute to dialysis patients.

Although "technically a layoff," DaVita Rx Vice President of Communications James "Skip" Thurman said this action came down after years of consolidation and technology advances in the pharmaceutical industry.

"We are concerned with the word "layoff" because we are killing ourselves recruiting people," Thurman told CoStar News. "We are out there trying to reel people in and we want to make sure teammates either come to us or to Walgreens."

Thurman said that Walgreens plans to hold a job fair on Monday and Tuesday in hopes of recruiting employees, such as those employees laid off in North Texas. In all, DaVita Rx has about 980 employees in the region.

The layoffs -- or hopeful transfer of employees -- at DaVita are expected to occur in mid-September. And Walgreens hopes to hire back those employees, said Scott Goldberg, a Walgreen Co. senior manager of media relations.

"Our goal is to offer an opportunity for DaVita Rx employees to gain employment at Walgreens where possible," Goldberg said, in an email to CoStar News. "DaVita Rx employees will have the opportunity to interview for open positions at existing Walgreen's retail store and central facility locations."

The locations of those central facility locations were not immediately available. However, Walgreens Co. does have a district office along Belt Line Road in Irving.

Other companies, such as State Farm Insurance and Liberty Mutual Insurance, have major regional operations centers in North Texas, as those companies seek to consolidate operations for a bottom line cost savings.

The real estate implications of DaVita divesting itself from this line of business have yet to be revealed, but Thurman said, "At some point there will be a transfer to new ownership, but that partnership is still being finalized."

Thurman declined to disclose additional details of the company's future real estate moves. If the real estate deal falls in line with the potential transfer of DaVita employees to Walgreens, the takeover of a real estate lease could occur in the fourth quarter of 2018.

Candace Carlisle, Dallas-Fort Worth Reporter  CoStar Group   
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