Rite Aid Provides Update on Sale of Assets to Walgreens Boots Alliance
January 22 2018 - 4:30PM
Business Wire
Rite Aid Corporation (NYSE: RAD) today provided an update on the
progress of its plans to sell stores to Walgreens Boots Alliance,
Inc. (Nasdaq: WBA) pursuant to the previously disclosed Amended and
Restated Asset Purchase Agreement, dated as of September 18, 2017
(the “Asset Purchase Agreement”). As of January 22, 2018, Rite Aid
has transferred 625 stores and related assets to WBA, and has
received cash proceeds of $1,309.8 million, which it is using to
repay all of its $970 million of outstanding secured loans while
maintaining a strong liquidity position. Under the Asset Purchase
Agreement, WBA will purchase a total of 1,932 stores, three
distribution centers and related inventory from Rite Aid for an
all-cash purchase price of $4,375 million on a cash-free, debt-free
basis.
“Our teams continue to make tremendous progress in transferring
stores to WBA and I want to thank them for their ongoing commitment
and dedication,” said Rite Aid Chairman and CEO John Standley. “We
are on track to complete the transfer of stores in the spring of
this year. Going forward, we remain focused on the continued smooth
execution of that process and capitalizing on our most significant
business-building opportunities as we work together to deliver a
great experience to our customers and patients, and drive value for
our shareholders.”
The majority of the closing conditions have been satisfied, and
the subsequent transfers of Rite Aid stores and related assets
remain subject to minimal customary closing conditions applicable
only to the stores being transferred at such subsequent closing, as
specified in the Asset Purchase Agreement. Additional details
regarding today’s announcement have been filed with the Securities
and Exchange Commission on Form 8-K.
Rite Aid is one of the nation's leading drugstore chains with
fiscal 2017 annual revenues of $32.8 billion. Information about
Rite Aid, including corporate background and press releases, is
available through the company's website at www.riteaid.com.
Cautionary Statement Regarding Forward Looking
Statements
Statements in this 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.
Such statements include, but are not limited to, statements
regarding the expected timing of subsequent closings of the sale of
Rite Aid stores and assets to WBA; the ability of the parties to
complete each of the subsequent closings for sale and related
subsequent transactions considering the various closing conditions
applicable to the stores, related assets and/or distribution
centers being transferred at such subsequent closing; the outcome
of legal and regulatory matters in connection with the sale of
stores and assets of Rite Aid to WBA; the expected benefits of the
transactions such as improved operations, growth potential, market
profile and financial strength; the competitive ability and
position of Rite Aid following completion of the proposed
transactions; the ability of Rite Aid to implement new business
strategies following the completion of the proposed transactions;
the ability of Rite Aid to repay its debt using the proceeds from
the proposed transactions and any assumptions underlying any of the
foregoing. Words such as “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,”
“project,” “should,” and “will” and variations of such words and
similar expressions are intended to identify such forward-looking
statements. These forward-looking statements are not guarantees of
future performance and involve risks, assumptions and
uncertainties, including, but not limited to, our high level of
indebtedness and our ability to make interest and principal
payments on our debt and satisfy the other covenants contained in
our debt agreements; general economic, industry, market,
competitive, regulatory and political conditions; our ability to
improve the operating performance of our stores in accordance with
our long term strategy; the impact of private and public
third-party payers continued reduction in prescription drug
reimbursements and efforts to encourage mail order; our ability to
manage expenses and our investments in working capital; outcomes of
legal and regulatory matters; changes in legislation or
regulations, including healthcare reform; our ability to achieve
the benefits of our efforts to reduce the costs of our generic and
other drugs; risks related to the proposed transactions, including
the possibility that the subsequent transactions may not close,
including because a governmental entity may prohibit, delay or
refuse to grant approval for the consummation of the transactions,
or may require conditions, limitations or restrictions in
connection with such approvals, the risk that there may be a
material adverse change of Rite Aid, or the business of Rite Aid
may suffer as a result of uncertainty surrounding the proposed
transactions; risks related to the ability to realize the
anticipated benefits of the proposed transactions; risks associated
with the financing of the proposed transaction; disruption from the
proposed transaction making it more difficult to maintain business
and operational relationships; the effect of the pending sale on
Rite Aid’s business relationships (including, without limitation,
customers and suppliers), operating results and business generally;
risks related to diverting management’s or employees’ attention
from ongoing business operations; the risk that Rite Aid’s stock
price may decline significantly if the proposed transaction is not
completed; significant transaction costs; unknown liabilities; the
risk of litigation and/or regulatory actions related to the
proposed transactions; potential changes to our strategy in the
event the remaining proposed transactions do not close, which may
include delaying or reducing capital or other expenditures, selling
assets or other operations, attempting to restructure or refinance
our debt, or seeking additional capital, and other business
effects. These and other risks, assumptions and uncertainties are
more fully described in Item 1A (Risk Factors) of our most recent
Annual Report on Form 10-K, and in other documents that we file or
furnish with the Securities and Exchange Commission, which you are
encouraged to read. 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. Rite Aid
expressly disclaims any current intention to update publicly any
forward-looking statement after the distribution of this release,
whether as a result of new information, future events, changes in
assumptions or otherwise.
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version on businesswire.com: http://www.businesswire.com/news/home/20180122006564/en/
Rite Aid CorporationINVESTORS:Byron Purcell, 717-975-5809or
investor@riteaid.comorMEDIA:Susan Henderson, 717-730-7766
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