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Walgreens to acquire Kerr Drug
September 10th, 2013
DEERFIELD, Ill., and RALEIGH, N.C. – In another sign of chain drug industry consolidation, Walgreen Co. plans to purchase Kerr Drug, which has 76 drug stores in North Carolina.
Financial terms of the transaction weren't disclosed. Under the deal announced Tuesday, Walgreens plans to acquire certain assets of Kerr's retail drug stores and specialty pharmacy business, which had fiscal 2012 sales of $381 million.
The acquisition deal, pending regulatory requirements and other conditions, is expected to close this year. Walgreens said it anticipates that the purchase won't have a material impact on earnings per share in fiscal year 2014.
After the agreement is finalized, the acquired stores will continue to operate under the Kerr name in the near term. The companies said decisions will be made over time regarding the best way to integrate the stores and specialty pharmacy business with Walgreens' operations.
The acquisition boosts Walgreens' presence in fast-growing markets of North Carolina. Kerr's standard of innovation and excellence in pharmacy service also aligns well with Walgreens' strategy to transform the role community pharmacy plays in health care.
"The Kerr Drug retail drug stores and specialty pharmacy business are an exceptional addition to the Walgreens family of companies," Walgreens president and chief executive officer Greg Wasson said in a statement. "We are closely aligned on the important task of expanding the health care role that community pharmacists can have with their patients, and we share the common goal of stepping out of the traditional drug store format to create a new experience for our customers."
The acquisition is structured as an asset transaction, including Kerr's stores, specialty pharmacy business and distribution center. Kerr will retain ownership of its long-term care pharmacy business.
"Kerr Drug's strategy and core principles have always been focused on its unique ability to provide patients access to the most comprehensive and convenient health and wellness offering in the industry" stated Kerr Drug chairman, president and CEO Anthony Civello. "Walgreens is the perfect partner to continue this journey as a patient-oriented company dedicated to expanding the role of the pharmacist as an integral part of health care."
The deal marks the second regional drug chain acquisition that Walgreens has made since unveiling its landmark partnership with Alliance Boots in June 2012.
In September 2012, Walgreens closed its $438 million deal to buy USA Drug, which had 144 drug stores, mainly in the mid-South region. The agreement was announced in early July.
Other chain drug acquisitions that Walgreens has made in the past few years include 25 Snyders Drug Stores locations in Minnesota from Katz Group North America in January 2010; 12 Eaton Apothecary pharmacies in the Boston area from D.A.W. Inc. in a deal that closed in February 2010; 260-store New York City chain Duane Reade in a nearly $1.1 billion deal that closed in April 2010; 18 ApothecaryRx pharmacies in September 2010 from Graymark Healthcare Inc.; all 10 Carle RxExpress pharmacies from The Carle Foundation in April 2011; and 30 community specialty pharmacies from BioScrip Inc. in February 2012.