Walgreens gets regulatory OK to buy Rite Aid stores
Walgreens Boots Alliance secured regulatory approval for a deal to buy stores from Rite Aid Corp. after a reduction in the number of stores and price. The deal will still enable Walgreens to dramatically increase its store footprint, giving it a total of about 10,000 U.S. locations.
The drug store chain announced Tuesday that it has secured regulatory clearance for a revised deal under which it will buy 1,932 stores, three distribution centers and related inventory from Rite Aid for $4.375 billion (and other consideration). The original proposal, announced in June, had included 2,186 stores and related assets for $5.175 billion.
“Combining Walgreens retail pharmacy network with a strong portfolio of Rite Aid locations is expected to help us achieve enhanced, sustainable growth while enabling us to broaden our reach and provide greater access to convenient, affordable care in more local neighborhoods across the United States," stated Stefano Pessina, executive vice chairman and CEO, Walgreens Boots Alliance.
The stores that Walgreens is purchasing from Rite Aid are located primarily in the Northeast and Southern U.S. After the acquisition is completed, they will be converted to the Walgreens banners in phases.
The three distribution centers being acquired are located in Dayville, Conn., Philadelphia, and Spartanburg, S.C. The transition of the centers to Walgreens will not begin for at least 12 months.
Along with the cash transaction, the deal also includes the assumption by Walgreens of the related real estate leases and the grant of the option to Rite Aid, exercisable through May 2019, to become a member of Walgreens Boots Alliance’s group purchasing organization, Walgreens Boots Alliance Development. Walgreens will also assume certain limited store-related liabilities as part of the new transaction.
Rite Aid expects to use a substantial majority of the net proceeds from the transaction to repay existing indebtedness which will improve the company's leverage levels. It also expects that the gain it will record on the sale of the assets will be largely offset by its net operating loss carryforwards, resulting in a minimal cash tax payment on this transaction.
Immediately following the completion of the transaction, Rite Aid will continue to operate approximately 2,600 stores and six distribution centers as well as EnvisionRx, its pharmacy benefit manager, RediClinic and Health Dialog.
"With a compelling and more profitable store footprint in key markets, enhanced purchasing capabilities and a stronger balance sheet and improved financial flexibility, we are well positioned to implement our plans to deliver improved results," stated John Standley, chairman and CEO, Rite Aid. "We are committed to supporting a smooth transition as we remain focused on delivering a great customer experience, improving our business and creating value for all of our stakeholders."
The transaction has been approved by the boards of directors of both companies and is still subject to other customary closing conditions. Store purchases are expected to begin in October, with completion anticipated in spring 2018.
Texas developer partners with United Way on Harvey
Fort Worth-based Trademark Property Co. has launched fundraisers at its properties in Texas to aid victims of Hurricane Harvey. Proceeds will be distributed via United Way, which is waiving all general and administrative fees in the arrangement with Trademark.
Tenants, financial partners, customers, and the community are being engaged in events, and Trademark has pledged to match up to $150,000 in donations. Miller Capital Advisory has pledged a matching donation total of $50,000 for fund collected at La Palmer in Corpus Christi.
Trademark also owns Rice Village in Houston.
“As a company with deep ties to Houston, Corpus Christi, and the Gulf Region, we are inspired by the stories of resilience and communities coming together,” said Trademark CEO Terry Montesi.
Trademark is inviting the real estate community donate online at app.mobilecause.com/vfu/HARVEYHELP or by texting HARVEYHELP to 30306.
Brixmor works to re-open 14 Irma-damaged properties
A limited number of tenants have been able to re-open their stores at 14 Brixmor properties severely damaged by Hurricane Irma. The company’s remaining 116 properties in Florida, Georgia, South Carolina, and Alabama are open and operating.
The partially opened properties, which were not named in the report from Brixmor, suffered wind and water related damages and power outages.
Brixmor is also assisting the effort to aid citizens in affected areas by providing funding for 300 cribs at Florida shelters housing displaced families. Company employees have also been directed to Habitat for Humanity’s effort to rebuild damaged homes.
"We are again relieved that our employee base in Brixmor's South region and their families are safe," said CEO James Taylor.