Inside This Issue - News
Walgreens buys Kerr
September 23rd, 2013
DEERFIELD, Ill. – The ranks of the nation’s regional drug chains continue to thin, with Walgreen Co. recently announcing plans to acquire Raleigh, N.C.-based Kerr Drug.
Structured as an asset transaction, the deal includes Kerr’s 76 drug stores in North Carolina, as well as its specialty pharmacy business and distribution center. Kerr will retain ownership of its long-term care pharmacy business. Financial terms of the deal were not disclosed.
Assuming it clears regulatory and other hurdles, the transaction is expected to close this year. Walgreens said it expects that the purchase won’t have a material impact on its earnings per share in fiscal year 2014.
The acquisition boosts Walgreens’ presence in a number of rapidly growing markets of North Carolina, and the company says that Kerr’s standard of innovation and excellence in pharmacy service also fits well with Walgreens’ own strategy to transform the role community pharmacy plays in health care.
"The Kerr Drug retail drug stores and specialty pharmacy business are an exceptional addition to the Walgreens family of companies," Walgreens president and chief executive officer Greg Wasson said in a statement. "We are closely aligned on the important task of expanding the health care role that community pharmacists can have with their patients, and we share the common goal of stepping out of the traditional drug store format to create a new experience for our customers."
The acquired stores will continue to operate under the Kerr name, at least for a while. The companies said decisions will be made over time regarding the best way to integrate the stores and specialty pharmacy business with Walgreens’ operations.
"Kerr Drug’s strategy and core principles have always been focused on its unique ability to provide patients access to the most comprehensive and convenient health and wellness offering in the industry," stated Kerr Drug chairman, president and CEO Anthony Civello. "Walgreens is the perfect partner to continue this journey as a patient-oriented company dedicated to expanding the role of the pharmacist as an integral part of health care."
Kerr Drug was founded by pharmacist Banks Kerr in 1951. In fiscal year 2012, Kerr Drug’s retail drug stores and speciality pharmacy business recorded total sales of $381 million. The chain says its mission is to be the most comprehensive provider of pharmacy and related health care services, while continuing to be the most reliable provider of health-related and convenience items.
Kerr’s health care services offerings include medication therapy management (MTM), and in March of this year OutcomesMTM named Kerr Drug the top regional chain in providing such services to patients in 2012. That marked the fourth time in the past six years that the chain was so recognized.
The acquisition of Kerr is the latest example of Walgreens’ recent omnivorous approach to expansion. For much of its history, Walgreens preferred to grow only by opening its own stores. That changed in a big way beginning in 2006, when the retailer acquired Newark, Del.-based Happy Harry’s Inc., a regional chain with 76 stores in Delaware, New Jersey and Pennsylvania. Walgreens initially continued to operate those stores under the Happy Harry’s banner.
Then, in April 2010, Walgreens agreed to buy the 258-store Duane Reade drug store chain from affiliates of Oak Hill Capital Partners for $1.08 billion in cash, including the assumption of about $457 million in debt. Walgreens, which continues to operate Duane Reade as a separate chain, said at the time that the deal bolstered its position in the New York market, while providing valuable insights about urban retailing and private brands.