Walgreens Boots Alliance announced two major investments in home-based care on October 14, totaling $5.5 billion. The first is a $5.2 billion investment in VillageMD, which advances an already significant partnership between the two companies that was established in 2019. Walgreens is also making a $330 million investment in CareCentrix, a health-at-home solutions company founded in 1996.
These major investments come as Walgreens unveils the launch of Walgreens Health, a new “consumer-centric health care strategy to drive sustainable, long-term profitable growth,” Walgreens Boots Alliance CEO Roz Brewer said in a press release. Walgreens Health will improve both the experience for consumers and their health outcomes at lower costs through its technology enabled care model powered by a nationally scaled, locally delivered healthcare platform.
VillageMD, a subsidiary of Village Medical, is a national leader in value-based primary care. The company provides primary care services across 15 markets to more than 1.6 million patients. Last year, VillageMD and Walgreens unveiled their five-year plan to expand the massive retailer’s full-service physician services at its stores, which included a $1 billion equity and convertible debt investment to be made in VillageMD over the following three years. Since then, Walgreens and VillageMD have opened 52 co-located practice locations together, and the two companies hope to increase that number to over 600 by 2025 and 1,000 by 2027, with more than half in underserved communities. In this transaction, Walgreens is increasing its investment in VillageMD from 30% to 63%, a move that will advance Walgreen’s strategic position in delivering value-based primary care. Additionally, under Walgreen’s wing, VillageMD has further plans to conduct an IPO in 2022.
The second deal involved CareCentrix, which connects patients with at-home care through its extensive national network of providers. The Hartford, Connecticut-based company manages care for more than 19 million members through its network of more than 7,400 credentialed provider locations across the United States. Walgreens’ investment now gives the retail chain majority ownership of CareCentrix, acquiring 55% of the company at an $800 million valuation, net of debt, with the option to purchase the remaining equity interests at a later date.
Walgreens is not the only major national retail chain making moves in the healthcare market recently. Walmart, Amazon and Best Buy have also shown a growing interest in acquiring assets in both health care and home care over the last few years. The Walgreens investment announcements also come just after the announced acquisition of Current Health by Best Buy, another retail giant entering the care-at-home market.
