What's Going On With Walgreens Stock Friday?

Walgreens Boots Alliance, Inc. (NASDAQ:WBA) shares are moving higher on Friday after the company entered an agreement to be acquired by private equity firm Sycamore Partners.

The Details: Sycamore Partners will pay approximately $10 billion to acquire the chain drug store. This equates to $11.45 per share, which represents an 8% premium over the stock’s closing price of $10.60 on Thursday.

Shareholders might receive an extra $3 in cash from the future monetization of the company's debt and equity holdings in VillageMD, a primary-care provider.

This deal comes after Walgreens has spent years struggling to compete with retail giants like Amazon and Walmart. The chain’s market capitalization has declined by 90% over the last decade.

Under CEO Tim Wentworth, the company began closing stores and cutting costs through a $1 billion program. Wentworth emphasized that while progress has been made in the company’s turnaround efforts, creating significant value will require time, focus and changes that are more effectively managed as a private company.

Sycamore Partners has experience acquiring major retail chains, having previously purchased Staples in a $6.9 billion deal before breaking the office supply company into separate parts.

“You have a business that is shrinking, and then you layer on losses and cash burn, all of that was the perfect recipe for what we are seeing today,” Brian Tanquilut, a healthcare services research analyst at Jefferies, told Reuters.

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WBA Price Action: At the time of publication, Walgreens stock is trading 7.12% higher at $11.36, according to data form Benzinga Pro.

Image: via Walgreens Boots Alliance, Inc.