Walgreens, Rite Aid amend deal to $7 per share, extend end date
DEERFIELD, Ill. — Walgreens Boots Alliance and Rite Aid on Monday morning extended their previously announced definitive merger agreement under which Walgreens Boots Alliance will acquire all outstanding shares of Rite Aid.
The retail pharmacy operations also restructured a new deal that would value Rite Aid at between about $6.8 billion and $7.4 billion, depending on required store divestitures, down from an initial acquisition cost of $9.4 billion.
Under the terms of the amendment, the parties have agreed to reduce the price for each share of Rite Aid common stock to be paid by Walgreens Boots Alliance. The revised price will be a maximum of $7 per share and a minimum of $6.50 per share. In addition, Walgreens Boots Alliance will be required to divest up to 1,200 Rite Aid stores and certain additional related assets if required to obtain regulatory approval.
The exact price per share will be determined based on the number of required store divestitures, with the price set at $7 per share if 1,000 stores or fewer are required for divestiture and at $6.50 per share if 1,200 stores are required for divestiture. If the required divestitures fall between 1,000 and 1,200 stores, then there will be a pro-rata adjustment of the price per share. Walgreens Boots Alliance agreement to divest up to 1,200 Rite Aid stores represents an increase of up to 200 stores over the 1,000 stores that Walgreens Boots Alliance had agreed to divest under the terms of the original agreement.
According to the original divestiture agreement with Fred's announced Dec. 20, if the FTC requires divestiture of more than the 865 Rite Aid stores currently contemplated by the purchase agreement and Walgreens Boots Alliance agrees to sell such stores, that purchase agreement requires Fred’s to purchase those additional stores.
Additionally, Walgreens Boots Alliance and Rite Aid agreed to extend the end date under the previously announced agreement from Jan. 27 to July 31 2017 in order to allow the parties additional time to obtain regulatory approval.
The transaction is subject to approval by the holders of Rite Aid’s common stock, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and other customary closing conditions.
Prestige Brands completes C.B. Fleet acquisition
TARRYTOWN, N.Y. — Prestige Brands completed its previously announced acquisition of C.B. Fleet for $825 million.
As part of the transaction, Prestige Brands acquired multiple feminine hygiene, gastrointestinal care and infant care over-the-counter brands, including Summer's Eve, Fleet, and Pedia-Lax, as well as a "mix and fill" manufacturing facility in Lynchburg Va.
The merger was first announced on Dec. 22. Prestige Brands announced the transaction was completed via a Form 8-K filed with the U.S. Securities and Exchange Commission.
“Based on Fleet’s long history of connecting with consumers, new product expansions, and leading market-share positions we believe the company is well positioned for long-term growth and fits into our well-established brand building platform. The acquisition of Fleet further enhances our women’s healthcare platform, currently anchored by Monistat, with the addition of Summer’s Eve. Upon closing, Summer’s Eve will also be our largest brand with over $125 million in sales. In addition, the transaction adds the leading brands of Fleet and Pedia-Lax to our gastrointestinal category, expanding the brands we offer in this category,” said Prestige Brands CEO Ron Lombardi at the time of the merger announcement. “The acquisition is also a key step in aligning our portfolio with our long-term stated goal of 2%-3% organic growth. We believe the addition of Fleet's manufacturing facility also provides strategic benefits and cost synergies as we look to expand manufacturing to include current Prestige products. Over time, we also expect to take advantage of Fleet research and development resources to enhance our new product development capabilities.”
The acquisition is expected to result in pro forma revenues of $1 billion for Prestige Brands in 2018.
Tarrytown-based Prestige Brands is known for the Monistat women's health products, BC and Goody's pain relievers, Clear Eyes eye care products, DenTek specialty oral care products, Dramamine motion sickness treatments, Chloraseptic sore throat treatments, Compound W wart treatments, Little Remedies pediatric over-the-counter products, The Doctor's NightGuard dental protector, Efferdent denture care products, Luden's throat drops, Beano gas prevention, Debrox earwax remover, Gaviscon antacid in Canada, and Hydralyte rehydration products and the Fess line of nasal and sinus care products in Australia.