What's Going On With Walgreens Stock Friday?

Walgreens Boots Alliance, Inc. 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.