Walgreen Co. is selling 51 percent of its infusion services business to Chicago-based private equity group Madison Dearborn Partners and creating a new independent, privately held infusion services company.
The deal marks the first major step for Walgreens Boots Alliance, formed in December in Walgreen’s takeover of European pharmacy owner Alliance Boots. The merged company is now the world’s largest pharmaceutical wholesale and distribution network.
Separating the infusion service business will help Walgreens Boots focus on its core retail and pharmacy business.
No terms were disclosed in the deal, which is expected to be completed in the April-to-June quarter. Walgreens Boots spokesman Jim Cohn said Tuesday that employees of the infusion services business will be transitioned to the new company and it will be headquartered in or around the north Chicago suburbs.
The transaction is not expected to have a material impact on earnings in fiscal year 2015, the company said.
Walgreens Infusion Services is one of the nation’s largest providers of home and alternate treatment site infusion services, with 4,700 employees and 89 infusion pharmacies and 110 alternate treatment sites in 40 states. Its nurses, pharmacists, technicians and dietitians treat patients who receive intravenous treatments for a range of diseases and disorders.
Deerfield-based Walgreen Co. got into the infusion services business in July 2007, when it announced its then-largest acquisition in its history: the $850 million buyout of Option Care Inc.
“This agreement will enable us to continue to strengthen the Walgreens infusion offering as part of our broad health care portfolio as we work closely with the new company, which will have a dedicated focus on this $14 billion and growing U.S. market,” Mike Ellis, vice president of Walgreens specialty pharmacy and infusion services, said in a statement.
Paul Mastrapa, the divisional vice president of Walgreens Infusion Services, will serve as the new company’s CEO.
Madison Dearborn Partners’ health care investments range from hospitals and skilled nursing facilities to specialty drugmakers and medical products.
Madison Dearborn Partners “looks forward to our business relationship with Walgreens, and we are confident the new company is well positioned to continue to grow in the alternate-site infusion services industry,” Madison Dearborn managing director Tim Sullivan said. “Working in close collaboration with Paul Mastrapa and his team, and also with Walgreens, we plan to invest in additional resources and new technology to enhance the company’s preeminent capabilities as an alternate site provider of critical health care services.”