Walgreens has had a busy few years in the healthcare M&A space, but the pharmacy and retail giant isn’t slowing down. Today, Walgreens announced its subsidiary, VillageMD, has agreed to purchase Summit Health-CityMD in a transaction valued at $8.9 billion, including debt. Walgreens is investing $3.5 billion in the deal, with other investments coming from an affiliate of Evernorth, a subsidiary of Cigna Corporation, which will remain a minority owner in Summit Health-CityMD.
VillageMD and Summit will have more than 680 provider locations in 26 markets.
Summit Health and CityMD merged in August 2019, creating Summit Health-CityMD, a primary, specialty and urgent care provider. Summit Health and CityMD have more than 2,800 providers across more than 370 locations in New York, New Jersey, Connecticut, Pennsylvania and Oregon. That transaction was spearheaded by Warburg Pincus, LLC, which took a majority stake in CityMD in 2017 in a deal reportedly valued at $800 million.
Walgreens took a 53% majority stake in VillageMD in 2021 in an investment worth approximately $5.2 billion, one of the company’s many acquisitions in the healthcare space in 2021. The company also purchased CareCentrix, Inc., a home health provider based in Hartford, Connecticut, for $330 million, and Shields Health Solutions, a specialty pharmacy network, for $1.37 billion.
This announcement comes during a period of intense M&A activity in the primary care space from competing retail giants, all of which want to leverage their scale to transform the healthcare industry. Amazon purchased One Medical in July for $3.9 billion and CVS is buying Signify Health for $8 billion.
