Gary Black Says Walgreens Is A Company That 'Shouldn't Be Public,' Cites Largest Shareholder's Role In $10 Billion Sycamore Deal

Walgreens Boots Alliance Inc WBA has entered into a definitive agreement to be taken private by Sycamore Partners in a deal valued at $10 billion, the company announced Thursday. The transaction, unanimously approved by Walgreens’ board, offers shareholders $11.45 per share in cash at closing.

What Happened: Gary Black, Managing Partner at The Future Fund LLC, highlighted the deal on X, saying WBA will be taken private by Sycamore Partners at $11.45 per share. He noted, “I’ve talked before about how this company shouldn’t be public,” adding that the move is driven by its largest shareholder, Executive chairman Stefano Pessina, who holds a 16.9% stake.

The agreement includes an additional potential payout of up to $3 per share from the future monetization of Walgreens’ interests in VillageMD, which encompasses Village Medical, Summit Health, and CityMD businesses.

“While we are making progress against our ambitious turnaround strategy, meaningful value creation will take time, focus and change that is better managed as a private company,” said Tim Wentworth, CEO of Walgreens. “Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds.”

Why It Matters: The transaction is expected to close in the fourth quarter of 2025, after which Walgreens will be delisted from the Nasdaq. WBA shares rose 5.85% in after-hours trading to $11.22 following the announcement.

The deal comes as Walgreens faces valuation challenges, with Black noting the company trades at “5x EV/EBITDA backed by strong secular megatrends (e.g., people living longer).” Recent analyst coverage shows a consensus price target of $20.82, suggesting the private equity deal may undervalue the company’s long-term potential.

Walgreens is scheduled to release its second-quarter financial results on Apr. 8, with analysts expecting earnings of 52 cents per share and revenue of $38.04 billion, according to Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.