Walgreen Co. (NYSE: WAG) (Nasdaq: WAG) announced today that it has
signed a definitive agreement with Water Street Healthcare Partners
(Water Street), a strategic investor focused exclusively on the health
care industry, in which Water Street will acquire a majority interest in
Take Care Employer Solutions, LLC. Take Care Employer Solutions is a
Walgreens subsidiary that manages more than 360 worksite health centers
nationwide.
Water Street also has signed an agreement to simultaneously invest in
CHS™ Health Services (CHS), a premier provider of more than 130 worksite
health centers. Water Street will merge Take Care Employer Solutions and
CHS to form a new company dedicated to providing worksite health centers
that improve the cost and quality of employee health care. The new
company will have more than 85 years of combined experience in employer
health solutions and will serve more than 200 leading corporations
through nearly 500 worksite health and wellness centers located across
the country.
“Walgreens, CHS and Water Street share a goal of maximizing employers’
return on their health care investment,” said Dr. Jeffrey Kang,
Walgreens senior vice president of health and wellness services and
solutions. “This strategic decision to bring together our organizations’
expertise, capabilities and resources to create a leading worksite
health and wellness company provides us an opportunity to play an even
greater role in improving the cost and quality of workforce health care.
Through our continued involvement in the business and as a preferred
strategic partner with Water Street, Walgreens expects to accelerate
tighter connections with employers – an important stakeholder in the
health care delivery system.”
“CHS and Take Care Employer Solutions are both deeply committed to
finding new ways to drive positive health care outcomes for our clients
and their employees. This merger will provide us with a significant
opportunity to transform onsite health care. Together, we will have the
experience and resources to create innovative strategies that will
improve patient engagement and positively impact health outcomes,” said
Stuart Clark, CEO, CHS.
Water Street will own a majority interest in the new company, and
Walgreens will own a significant minority interest and have
representatives on the new company’s board of directors. The new company
will be led by Stuart Clark, CEO. Trent Riley, divisional vice
president, Take Care Employer Solutions Group, will serve as COO. The
name of the new company will be determined during the integration
process.
“We are pleased that Walgreens and CHS have selected Water Street to
collaboratively and strategically grow their businesses. We will
leverage our team’s experience and network of relationships in health
care services to expand the new company’s capabilities and create
greater long-term value for the business and clients,” said Steve
Cosler, an operating partner with Water Street who has more than 20
years of experience in outsourced health care.
Walgreens will continue to manage its existing worksite pharmacies in
collaboration with the new company.
Healthcare Clinic at select Walgreens, with more than 400 in-store
clinic locations that formerly operated under the Take Care Clinic name,
is not part of this transaction. Walgreens will continue to manage these
clinics.
Comprehensive Health Services, Inc. (CHSi), an entity related to CHS
that specializes in government contracting health services and
logistics, is not part of this transaction. It will remain an
independent organization with no changes to its ownership structure or
leadership team.
Financial terms of the agreement were not disclosed. Walgreens
anticipates the transaction will not have a material impact on earnings
per share in fiscal year 2014.
The transaction is subject to satisfaction of regulatory requirements
and other conditions, and is expected to close by mid-calendar year
2014. Until the close of the transaction, Take Care Employer Solutions
and CHS will operate business as usual and as separate companies.
About Walgreens
As the nation's largest drugstore chain with fiscal 2013 sales of $72
billion, Walgreens (www.walgreens.com)
vision is to be the first choice in health and daily living for everyone
in America, and beyond. Each day, Walgreens provides more than 6 million
customers the most convenient, multichannel access to consumer goods and
services and trusted, cost-effective pharmacy, health and wellness
services and advice in communities across America. Walgreens scope of
pharmacy services includes retail, specialty, infusion, medical facility
and mail service, along with respiratory services. These services
improve health outcomes and lower costs for payers including employers,
managed care organizations, health systems, pharmacy benefit managers
and the public sector. The company operates 8,210 drugstores in all 50
states, the District of Columbia, Puerto Rico and the U.S. Virgin
Islands. Walgreens also manages Healthcare Clinic at select Walgreens,
with more than 400 locations throughout the country.
About Take Care Employer Solutions
Since its formation through the combination of CHD Meridian, Whole
Health Management and Walgreens workplace pharmacy operations in 2008,
Take Care Employer Solutions has built its business to become the
nation’s premier provider of employer-based health care services. Take
Care Employer Solutions serves 180 clients across multiple industries,
and has more than 360 health centers, pharmacies and fitness centers
located across 45 states, the District of Columbia and Guam. Take Care
Employer Solutions has received AAAHC Medical Home accreditation,
recognizing that all of its primary care worksite health centers meet
AAAHC requirements to be considered a patient-centered medical home –
embodying best practices and operating in compliance with
nationally-recognized standards of care.
About CHS
Founded in 1975, CHS is one of the largest providers of worksite health
centers for employers in the United States. The company operates more
than 130 employer-based worksite health centers that focus on patient
engagement and behavioral change to improve health and mitigate costs.
CHS customizes its programs to align with each employer’s benefits
strategy and goals. The company is headquartered in Brentwood, Tennessee.
About Water Street
Water Street is a strategic investor focused exclusively on the health
care industry. The firm has a strong record of building market-leading
companies across key growth sectors in health care. It has worked with
some of the world’s leading health care companies on its investments
including Johnson & Johnson, Medtronic, and Gentiva. Water Street’s team
is composed of industry executives and investment professionals with
decades of experience investing in and operating global health care
businesses. The firm is headquartered in Chicago. For more information
about Water Street, visit waterstreet.com.
Cautionary Note Regarding Forward-looking
Statements: Statements in this press release that are not
historical are forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995. Words such as “expect,” “likely,” “outlook,” “forecast,” “would,”
“could,” “should,” “can,” “will,” “project,” “intend,” “plan,”
“continue,” “sustain,” “synergy,” ”on track,” “believe,” “seek,”
“estimate,” “anticipate,” “may,” ”possible,” “assume,” variations of
such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of
future performance and are subject to risks, uncertainties and
assumptions that could cause actual results to vary materially from
those indicated, including: the ability to satisfy the closing
conditions and consummate the proposed transactions on a timely basis or
at all, the ability to achieve anticipated financial results, changes in
vendor, payer and customer relationships and terms, and other factors
described in Item 1A (Risk Factors) of Walgreens most recent Annual
Report on Form 10-K and Quarterly Report on Form 10-Q, each of which is
incorporated herein by reference and in other documents that Walgreens
files or furnishes with the Securities and Exchange Commission. Should
one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by such forward-looking
statements. Accordingly, you are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date
they are made. Except to the extent required by law, Walgreens does not
undertake, and expressly disclaims, any duty or obligation to update
publicly any forward-looking statement after the date of this report,
whether as a result of new information, future events, changes in
assumptions or otherwise.
Copyright Business Wire 2014