Fred’s Inc. (NASDAQ: FRED) has had second thoughts about the specialty pharmacy business. Three years ago, in March 2015, the retailer acquired Reeves-Sain Drug Store, Inc., a retail pharmacy with a single location in Murfreesboro, Tennessee. Included in the $66 million deal was EntrustRx Specialty Pharmacy, a direct-to-consumer operation with three locations in Mississippi and Tennessee.

EnTrustRx was licensed in all 50 states, and dispenses specialty pharmaceuticals to treat complex conditions and diseases that require ongoing support for extensive periods of time. Its main therapy lines include hepatitis C, oncology, growth hormones, multiple sclerosis and rheumatology.

In the last two years, however, Fred’s retail pharmacy operations have stagnated, despite the chain’s concerted efforts to raise performance. Its portfolio includes 600 general merchandise and pharmacy stores, which are also suffering from lower foot traffic, excess inventory and other problems.

On the company’s Q1:18 earnings call on May 4, 2018, interim CEO and ongoing CFO Joseph Anto told analysts that a turnaround plan was under way to eliminate debt load, generate significant EBITDA and free cash flow on a run-rate basis by the end of Q4:18.

One way to achieve a few of those goals is to shed non-core assets, and that was exactly what happened on May 8. Fred’s confirmed the sale of “certain assets” of the EntrustRx business to none other than CVS Health Corp. (NYSE: CVS), for “aggregate consideration” of $40 million, plus an amount equal to the value of EntrustRx’s inventory.

The cash proceeds will go toward paying down “a significant portion” of its $168 million debt load, as well as for general corporate purposes.

Fred’s stock, which was $14.71 per share on May 8, 2017, has fallen 89% a year later, to $1.67 per share.

For CVS, which reported glowing Q1:18 results on May 2, the acquisition bolsters its already large specialty pharmacy business. Revenues in the pharmacy services division rose 3.2% to approximately $32.2 billion in the three months ended March 31, 2018. The increase was primarily driven by growth in pharmacy network and specialty claim volume as well as brand inflation, partially offset by continued price compression and increased generic dispensing.