Walgreens Boots Alliance may once again try to sell or spin off its Boots pharmacies in the United Kingdom as the company’s new chief executive officer reviews the company’s businesses and faces a more urgent need to cut debt.
Last year, former Walgreens chief executive Roz Brewer shelved plans to sell more than 2,000 Boots pharmacies, citing “market instability severely impacting financing availability” for third parties interested in Boots and No7 Beauty Company. “Consequently, WBA has decided that it is in the best interests of shareholders to keep focusing on the further growth and profitability of the two businesses,” Walgreens said in June of last year.
Now, Walgreens has a new CEO in Tim Wentworth, who appears to be interested in unloading Boots via sale. A Bloomberg report also said Walgreens was considering an initial public offering of Boots in London.
Meanwhile, sources close to Walgreens say the new top executive, who joined Walgreens less than two months ago, has little interest in running businesses outside the U.S. and is focused squarely on building up the U.S. healthcare business.
Wentworth has more than 30 years of healthcare industry experience, most recently serving as chief executive of Evernorth, Cigna’s $100 billion health services business, which includes Express Scripts, the large pharmacy benefit management company. Wentworth was CEO of Express Scripts when the PBM sold to Cigna for $54 billion.
Reports about another attempt to sell or spin off Boots come during the same week Walgreens had its senior unsecured credit rating cut to junk by Moody’s Investors Service. The ratings agency cited Walgreens high debt relative to earnings and risks associated with its strategy to offer more healthcare services.
But Walgreens has been cutting debt this year and plans to reduce its debt next year even while spending billions of dollars investing in VillageMD, the primary care company working with Walgreens to attach doctor-staffed clinics next to its drugstores.
Boots pharmacies are valued between $8 billion and $9 billion, according to the Bloomberg report.
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