DEERFIELD, Ill. -- The Walgreen Co. said that it has entered into an agreement to purchase a regional drugstore chain in the U.S. Mid-South from Stephen L. LaFrance Holdings Inc. and members of the LaFrance family. The transaction includes 144 stores operated under the USA Drug, Super D Drug, May's Drug, Med-X and Drug Warehouse brands in Arkansas, Kansas, Mississippi, Missouri, New Jersey, Oklahoma and Tennessee.
USA Drug also operates an undetermined number of gas stations.
The acquired drugstores will continue in the near term to operate under their current brand names after the transaction closes, and decisions will be made over time regarding the best, most effective way to harmonize Walgreens and the acquired brands.
The acquisition also includes corporate offices in Little Rock, Ark., a distribution center located in Pine Bluff, Ark., and a wholesale and private brand business, for a total of approximately $438 million subject to adjustment in certain circumstances. The chain recorded sales of $825 million in 2011.
"This acquisition expands our business in an important region of the country," said Walgreens president and CEO Greg Wasson. "It will provide significant new pharmacy business for us in this region while also enabling us to bring the Walgreens experience to many additional smaller communities where USA Drug has developed strong operational expertise."
The transaction is subject to satisfaction of regulatory requirements and other closing conditions, and is expected to close around Sept. 1, 2012. Walgreens currently expects that the transaction will not have a material impact on earnings per share in fiscal year 2012.
"What is now USA Drug began from a single store I opened in Pine Bluff, Ark., in 1968 and has grown to more than 140 stores in seven states," said Stephen L. LaFrance, chairman and owner of Stephen L. LaFrance Holdings. "We chose to sell our business to Walgreens not only because it is the premier drugstore company in our industry, but also because Walgreens will continue to provide our customers with the service and products they have come to expect.
The transaction is structured as a purchase of the stock of Stephen L. LaFrance Holdings, which owns most of the acquired business, and also includes the purchase of assets or stock of certain affiliated companies or stores and other parts of the business that are not owned by that holding company.
As the nation's largest drugstore chain with fiscal 2011 sales of $72 billion, Walgreens provides nearly six million customers the most convenient, multichannel access to consumer goods and services and pharmacy, health and wellness services and advice in communities across America. The company operates 7,890 drugstores in all 50 states, the District of Columbia and Puerto Rico.
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