Walgreens Boots Alliance (WBA), one of the world’s largest retail, pharmacy and drug wholesale companies, was on track to be a winner during the Covid-19 pandemic. But its retail businesses in the US and the UK found it difficult to attract customers in spite of their essential status in both markets.
Late last year, WBA hired Goldman Sachs, the global investment and banking firm, to explore options to sell Boots, the iconic UK chemist chain, or list it as a standalone business. The multinational has confirmed the possibility of a sale as it re-focuses on its healthcare business in the US.
Private equity majors, Bain Capital and CVC Capital Partners, are working on a joint bid to acquire Boots but its early days yet, reports the Financial Times.
Any successful offer will include No7, the Boots-owned beauty line, in addition to its 2200 stores worldwide.
KKR, the US private equity giant, completed the privatisation of Boots in 2007, together with Italian pharmacy mogul Stefano Pessina. The deal was the UK’s largest leveraged buyout to date.
Walgreens, the US pharmacy major, bought a 45 per cent share in Boots in 2012 and took full control in 2014.
In the 12 months to August 2020, Boots suffered an operating loss of $463.5 million against a profit of $374.55 million for the year prior, due to the impact of the Covid-19 pandemic.
There has been a turnaround in the first quarter of the 2022 fiscal year with sales increasing by 16.3 per cent because of increased foot traffic.
Industry analysts believe that Boots has the potential to return to profitability as a standalone business under new ownership and further development of its digital operations, which have doubled since 2020.