Deerfield, Ill. -- Walgreens Co. has entered into an agreement to acquire Stephen L. LaFrance Holdings Inc., the owner and operator of the USA Drug chain, for about $438 million, gaining stores in several Southern states. The acquisition comes on the heels of Walgreens’ announcement that it was buying a 45% stake in Alliance Boots GmbH for $6.7 billion last month to expand globally.
The transaction gives Walgreens 144 stores under several banners, including USA Drug, Super D Drug, May’s Drug, Med-X and Drug Warehouse. The acquired stores are located in Arkansas, Kansas, Mississippi, Missouri, New Jersey, Oklahoma and Tennessee.
The deal also includes corporate offices and a distribution center located in Pine Bluff, Ark., and a wholesale and private-brand business. It is expected to close Sept. 1.
Walgreens said that the acquired drug stores will continue to operate under their current brand names after the transaction closes. The chain said decisions will be made over time regarding the best, most effective way to harmonize Walgreens and the acquired brands.
“This acquisition expands our business in an important region of the country,” Walgreens president and CEO Greg Wasson said. “It will provide significant new pharmacy business for us in this region while also enabling us to bring the Walgreens experience to many additional smaller communities where USA Drug has developed strong operational expertise.”
Stephen LaFrance, who serves as owner and chairman of Stephen L. LaFrance Holdings, said the decision to sell the chain -- which recorded sales of $825 million in 2011 -- was “not only because it is the premier drugstore company in [our] industry, but also because Walgreens will continue to provide [our] customers with the service and products they have come to expect.”
The transaction is structured as a purchase of the stock of Stephen L. LaFrance Holdings, 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.