VillageMD, a unit of Walgreens Boots Alliance, will acquire a majority stake in Summit Health-CityMD for $8.9 billion, the companies announced Monday.
Summit Health-CityMD provides primary, specialty and urgent care across the Northeastern U.S. and in Oregon. Following the acquisition, which is expected to close Jan. 1, VillageMD and Summit will have more than 680 locations in 26 markets.
VillageMD CEO Tim Barry called the deal an “epic milestone” in a news release.
Walgreens will invest $3.5 billion to support the acquisition and own 53% of VillageMD shares. The deal will boost the drugstore chain’s earnings: Walgreens is raising its 2023 EBITDA targets to between -$50 million to $25 million, compared with the previously targeted -$240 million to -$220 million.
Cigna subsidiary Evernorth is also involved in the deal; the companies did not disclose the financial details.
“Adding our expertise and geographic coverage to VillageMD’s proven value-based primary care approach will enhance the lives of so many patients and physicians across the country, helping to lower healthcare costs and improve the health of our communities,” Summit Health CEO Jeff Alter said in the news release.
This is a developing story. Please check back for updates.