Fred’s in $40 million deal with CVS Health
That didn’t take very long.
One week after Memphis-based discounter Fred’s announced that it was looking to sell its specialty pharmacy business, the retailer announced it has entered into a deal with CVS Health Corp. Fred’s said it has reached a definitive agreement to sell certain assets of its EntrustRx unit to a subsidiary of CVS Health for $40 million, plus an amount equal to the value of inventory of EntrustRx.” The deal is expected to close by the end of May.
“One of Fred’s top priorities for 2018 has been to monetize non-core assets and we are pleased to have reached an agreement for the sale of EntrustRx,” said Joe Anto, CFO and interim CEO, Fred’s, which operates 600 general merchandise and pharmacy stores across the Southeast. “The cash proceeds will allow us to pay down a significant portion of our debt and also be used for general corporate purposes.”
The deal is in line with CVS Health’s emphasis on its expanding specialty pharmacy business. And it comes as Anto, who was named interim CEO of Fred’s in April when Michael Bloom resigned, is looking to shed some of Fred’s non-core assets in an effort to improve the chain’s profitability. Last week, he said Fred’s was evaluating various options for its retail pharmacy portfolio.
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