Retail News Breaks Archives
Walgreens agrees to acquire drugstore.com
March 24th, 2011
DEERFIELD, Ill. – Walgreen Co. has agreed to acquire online retailer drugstore.com for approximately $409 million.
Walgreens will fund the purchase with existing cash and expects the deal, which is subject to customary regulatory requirements and conditions as well as shareholder approval, to close by the end of this June.
"Our acquisition of drugstore.com today significantly accelerates our online strategy to leverage the best community store network in America by becoming the most convenient choice for health and daily living needs, whether customers shop online or in our stores," said Greg Wasson, president and chief executive officer of Walgreens. "This acquisition offers a unique opportunity that will provide us immediate access to more than 3 million savvy, online loyal customers and will allow us to move even closer to our existing customers through relationships with new vendors and partners, adding approximately 60,000 products to our already strong online offering."
Wasson added that drugstore.com’s strength in the health, personal care, beauty and vision categories, which includes such targeted web sites as Beauty.com, SkinStore.com and VisionDirect.com, will complement Walgreens’ own multichannel initiatives and enhance its positioning as the most convenient multichannel retailer of health and daily living needs. The separate web sites will be maintained after the acquisition is completed.
Under the terms of the agreement, drugstore.com stockholders will receive $3.80 in cash for each share of stock, which represents an equity value of about $429 million. The price per share is a premium of approximately 102% above drugstore.com’s 30-day average closing stock price and a premium of approximately 113% over the closing price of drugstore.com’s common stock on March 23, the last trading day before the announcement.
"We believe the acquisition of drugstore.com by Walgreens is a great fit for all of our constituencies," said Dawn Lepore, chairman and chief executive officer of drugstore.com. "Drugstore.com benefits by joining the largest and most trusted drug store chain in the U.S. Our growth strategies are perfectly aligned and Walgreens will be able to accelerate and expand the investments necessary to achieve our vision and growth opportunities. We believe we have made significant progress over the last six years and built an organization with a broad and deep bench of Internet experience."
In 2010 drugstore.com had sales of more than $456 million, making it the eighth-largest online retailer in the United States, according to Internet Retailer magazine. Walgreens will maintain drugstore.com’s corporate office in Bellevue, Wash. after the transaction is completed.
"This is a very exciting time for the Walgreens e-commerce business as we expand and build our multichannel capabilities for a $67 billion sales company with the best and most convenient store network in America," said Sona Chawla, president of e-commerce for Walgreens. "Drugstore.com significantly accelerates our multichannel initiatives by expanding our product selection for our customers, adding new capabilities through their well-known beauty and skin care web sites and joining their talented team with our strong and growing e-commerce organization."