Walgreens Treats Lack of Web Presence With Drugstore.com Purchase
Just what the doctor ordered.
Walgreens will acquire drugstore.com for about $409 million in cash to significantly accelerate its online strategy.
Under the terms of the agreement, drugstore.com will receive $3.80 in cash for each share, which is roughly 102 percent over drugstore.com’s 30-day average closing stock price.
This is no big exit for the Bellevue, WA-based company, which was founded 13 years ago in the dotcom heyday. The purchase price also falls below the company’s 2010 revenues.
In other words, not the Web 1.0 exit expected way back when.
Walgreens President and CEO Greg Wasson: “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.”
Walgreens will fund the acquisition with cash and anticipates the merger to close by the end of June. The merger is subject to customary conditions, including approval by drugstore.com’s stockholders. The agreement was unanimously approved by drugstore.com’s board.
In a statement, drugstore.com’s CEO Dawn Lepore, said the company will benefit from this transaction by joining the largest chain in the U.S. “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. The opportunity to become a part of Walgreens is the right next step in this journey.”
Walgreens said it will maintain drugstore.com’s Bellevue headquarters. In all, the company employs about 1,000 people at its offices, call center and distribution centers. Walgreens will also maintain the brands separately, including Beauty.com, SkinStore.com and VisionDirect.com, after the transaction closes.
In 2010, drugstore.com’s revenues totaled $456 million, which are relatively small compared to Walgreens’ revenues of $67 billion.