Walgreens To Acquire Duane Reade

Walgreen Co. will acquire Duane Reade from affiliates of Oak Hill Capital Partners in a cash transaction for a total enterprise value of $1.075 billion, which includes the assumption of debt, the companies announced today.

The transaction includes all 257 Duane Reade stores located in the New York City metropolitan area, as well as the corporate office and two distribution centers. Walgreens anticipates that the transaction will close in its current fiscal year, which ends Aug. 31.

Duane Reade will continue to operate under its brand name after the transaction closes, according to Walgreens, which is based in Deerfield, IL.

“Duane Reade is a compelling strategic acquisition that will immediately provide Walgreens with a leading position in the largest drugstore market in the U.S.,” said Walgreens president and chief executive offier Greg Wasson. “In addition, Duane Reade’s recent initiatives in urban retailing, customer loyalty and private brand products support and accelerate Walgreens strategy to enhance the customer experience in our network of more than 7,100 stores across the country.”

Duane Reade had unaudited net sales of $1.8 billion for the latest 12-month period ending Dec. 26, 2009, and has the highest sales per square foot in the retail drugstore industry nationwide.

Walgreens, which currently operates 70 stores in the New York City metropolitan area, said decisions will be made over time as to the best, most effective way to harmonize the Walgreens and Duane Reade brands.