- Walgreens will be a preferred strategic
partner with Water Street and will retain a significant minority
interest in the new company, while continuing to manage existing
Walgreens worksite pharmacies
- The new company will include Take Care
Employer Solutions’ worksite health and wellness centers and CHS’
worksite health centers
Walgreen Co. (NYSE: WAG) (Nasdaq: WAG) announced today that it
has signed a definitive agreement with Water Street Healthcare
Partners (Water Street), a strategic investor focused exclusively
on the health care industry, in which Water Street will acquire a
majority interest in Take Care Employer Solutions, LLC. Take Care
Employer Solutions is a Walgreens subsidiary that manages more than
360 worksite health centers nationwide.
Water Street also has signed an agreement to simultaneously
invest in CHS™ Health Services (CHS), a premier provider of more
than 130 worksite health centers. Water Street will merge Take Care
Employer Solutions and CHS to form a new company dedicated to
providing worksite health centers that improve the cost and quality
of employee health care. The new company will have more than 85
years of combined experience in employer health solutions and will
serve more than 200 leading corporations through nearly 500
worksite health and wellness centers located across the
country.
“Walgreens, CHS and Water Street share a goal of maximizing
employers’ return on their health care investment,” said Dr.
Jeffrey Kang, Walgreens senior vice president of health and
wellness services and solutions. “This strategic decision to bring
together our organizations’ expertise, capabilities and resources
to create a leading worksite health and wellness company provides
us an opportunity to play an even greater role in improving the
cost and quality of workforce health care. Through our continued
involvement in the business and as a preferred strategic partner
with Water Street, Walgreens expects to accelerate tighter
connections with employers – an important stakeholder in the health
care delivery system.”
“CHS and Take Care Employer Solutions are both deeply committed
to finding new ways to drive positive health care outcomes for our
clients and their employees. This merger will provide us with a
significant opportunity to transform onsite health care. Together,
we will have the experience and resources to create innovative
strategies that will improve patient engagement and positively
impact health outcomes,” said Stuart Clark, CEO, CHS.
Water Street will own a majority interest in the new company,
and Walgreens will own a significant minority interest and have
representatives on the new company’s board of directors. The new
company will be led by Stuart Clark, CEO. Trent Riley, divisional
vice president, Take Care Employer Solutions Group, will serve as
COO. The name of the new company will be determined during the
integration process.
“We are pleased that Walgreens and CHS have selected Water
Street to collaboratively and strategically grow their businesses.
We will leverage our team’s experience and network of relationships
in health care services to expand the new company’s capabilities
and create greater long-term value for the business and clients,”
said Steve Cosler, an operating partner with Water Street who has
more than 20 years of experience in outsourced health care.
Walgreens will continue to manage its existing worksite
pharmacies in collaboration with the new company.
Healthcare Clinic at select Walgreens, with more than 400
in-store clinic locations that formerly operated under the Take
Care Clinic name, is not part of this transaction. Walgreens will
continue to manage these clinics.
Comprehensive Health Services, Inc. (CHSi), an entity related to
CHS that specializes in government contracting health services and
logistics, is not part of this transaction. It will remain an
independent organization with no changes to its ownership structure
or leadership team.
Financial terms of the agreement were not disclosed. Walgreens
anticipates the transaction will not have a material impact on
earnings per share in fiscal year 2014.
The transaction is subject to satisfaction of regulatory
requirements and other conditions, and is expected to close by
mid-calendar year 2014. Until the close of the transaction, Take
Care Employer Solutions and CHS will operate business as usual and
as separate companies.
About Walgreens
As the nation's largest drugstore chain with fiscal 2013 sales
of $72 billion, Walgreens (www.walgreens.com) vision is to be the
first choice in health and daily living for everyone in America,
and beyond. Each day, Walgreens provides more than 6 million
customers the most convenient, multichannel access to consumer
goods and services and trusted, cost-effective pharmacy, health and
wellness services and advice in communities across America.
Walgreens scope of pharmacy services includes retail, specialty,
infusion, medical facility and mail service, along with respiratory
services. These services improve health outcomes and lower costs
for payers including employers, managed care organizations, health
systems, pharmacy benefit managers and the public sector. The
company operates 8,210 drugstores in all 50 states, the District of
Columbia, Puerto Rico and the U.S. Virgin Islands. Walgreens also
manages Healthcare Clinic at select Walgreens, with more than 400
locations throughout the country.
About Take Care Employer Solutions
Since its formation through the combination of CHD Meridian,
Whole Health Management and Walgreens workplace pharmacy operations
in 2008, Take Care Employer Solutions has built its business to
become the nation’s premier provider of employer-based health care
services. Take Care Employer Solutions serves 180 clients across
multiple industries, and has more than 360 health centers,
pharmacies and fitness centers located across 45 states, the
District of Columbia and Guam. Take Care Employer Solutions has
received AAAHC Medical Home accreditation, recognizing that all of
its primary care worksite health centers meet AAAHC requirements to
be considered a patient-centered medical home – embodying best
practices and operating in compliance with nationally-recognized
standards of care.
About CHS
Founded in 1975, CHS is one of the largest providers of worksite
health centers for employers in the United States. The company
operates more than 130 employer-based worksite health centers that
focus on patient engagement and behavioral change to improve health
and mitigate costs. CHS customizes its programs to align with each
employer’s benefits strategy and goals. The company is
headquartered in Brentwood, Tennessee.
About Water Street
Water Street is a strategic investor focused exclusively on the
health care industry. The firm has a strong record of building
market-leading companies across key growth sectors in health care.
It has worked with some of the world’s leading health care
companies on its investments including Johnson & Johnson,
Medtronic, and Gentiva. Water Street’s team is composed of industry
executives and investment professionals with decades of experience
investing in and operating global health care businesses. The firm
is headquartered in Chicago. For more information about Water
Street, visit waterstreet.com.
Cautionary Note Regarding Forward-looking
Statements: Statements in this press release that are not
historical are forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Words such as “expect,” “likely,” “outlook,” “forecast,”
“would,” “could,” “should,” “can,” “will,” “project,” “intend,”
“plan,” “continue,” “sustain,” “synergy,” ”on track,” “believe,”
“seek,” “estimate,” “anticipate,” “may,” ”possible,” “assume,”
variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to risks,
uncertainties and assumptions that could cause actual results to
vary materially from those indicated, including: the ability to
satisfy the closing conditions and consummate the proposed
transactions on a timely basis or at all, the ability to achieve
anticipated financial results, changes in vendor, payer and
customer relationships and terms, and other factors described in
Item 1A (Risk Factors) of Walgreens most recent Annual Report on
Form 10-K and Quarterly Report on Form 10-Q, each of which is
incorporated herein by reference and in other documents that
Walgreens files or furnishes with the Securities and Exchange
Commission. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated or
anticipated by such forward-looking statements. Accordingly, you
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date they are made. Except
to the extent required by law, Walgreens does not undertake, and
expressly disclaims, any duty or obligation to update publicly any
forward-looking statement after the date of this report, whether as
a result of new information, future events, changes in assumptions
or otherwise.
Contact for Walgreens:Michael Polzin,
847-315-2920http://news.walgreens.com@WalgreensNewsfacebook.com/WalgreensorContact
for CHS and Water Street:Kelly Zitlow, 847-858-5230
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