Walgreens's VillageMD to Buy Summit Health

By Sabela Ojea

VillageMD on Monday said that it is buying the parent company of CityMD urgent-care centers, Summit Health-CityMD, for about $8.9 billion.

Village Practice Management, a majority-owned unit of drugstore giant Walgreens Boots Alliance Inc., said both parties will create a multi-payor platform to deliver affordable care for patients in the U.S.

Earlier on Monday, The Wall Street Journal reported the Walgreens unit was nearing a deal to combine with the owner of medical practices and urgent-care centers, the latest in a string of acquisitions by big consumer-focused companies aiming to delve deeper into medical care.

Walgreens said it will invest $3.5 billion in the platform through a mix of debt and equity to support the deal.

Through the combination of both groups, VillageMD and Summit Health will have more than 680 provider locations in 26 markets, the company said.

As a result of the merger, Walgreens said that it expects its U.S. healthcare division to achieve sales between $14.5 billion to $16 billion fiscal 2025, up from a prior forecast for sales of up to $12 billion.

The transaction will also be slightly accretive to Walgreens's adjusted earnings per share for fiscal 2023, it said.

Write to Sabela Ojea at sabela.ojea@wsj.com

(END) Dow Jones Newswires

November 07, 2022 10:01 ET (15:01 GMT)

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