Madison Dearborn Partners (MDP) has signed an agreement with Walgreens to acquire a majority interest in Walgreens Infusion Services. The transaction is expected to close during the second quarter of calendar year 2015. At the conclusion of this transaction, Walgreens Infusion Services will become a new independent, privately-held company with Walgreens maintaining a significant minority interest.
Walgreens Infusion Services is one of the nation’s largest providers of home and alternate treatment site infusion services. Walgreens Infusion Services’ geographic footprint includes 89 infusion pharmacies and 110 alternate treatment sites in 40 states, approximately 4,700 employees and the ability to serve more than 90 percent of the US population. Its clinical personnel, including nurses, pharmacists, technicians and dieticians, treat patients who are managing a broad range of acute and chronic conditions.
Paul Mastrapa, current divisional vice president of Walgreens Infusion Services, will serve as the new company’s CEO. “The new company, which will have an industry-leading management team supported by MDP and Walgreens, will be positioned to provide even greater value to patients, local health systems, health plans and pharmaceutical manufacturers,” said Mr. Mastrapa.
In support of the transaction, BofA Merrill Lynch will lead the first lien financing and Goldman Sachs Mezzanine fund is providing the second lien notes.
Madison Dearborn Partners has a history of successfully investing in health care across a range of sub-sectors including hospitals, home and community-based care, skilled nursing facilities, life sciences, specialty pharmaceuticals and medical products. Investments in health care services companies include Team Health, National Mentor Holdings and Valitas. The firm’s most recent health care investments include Kaufman Hall, Ikaria and Sage Products.
“MDP looks forward to our business relationship with Walgreens, and we are confident the new company is well positioned to continue to grow in the alternate-site infusion services industry,” said Tim Sullivan, managing director, Madison Dearborn Partners. “Working in close collaboration with Paul Mastrapa and his team, and also with Walgreens, we plan to invest in additional resources and new technology to enhance the company’s preeminent capabilities as an alternate site provider of critical health care services.”
Madison Dearborn Partners has more than $18 billion of capital under management. Sectors of interest include basic industries; business and government services; consumer; financial and transaction services; healthcare; and telecom, media and technology services. Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).
Walgreens is the nation’s largest drugstore chain and constitutes the Retail Pharmacy USA Division of Walgreens Boots Alliance (Nasdaq: WBA). Walgreens operates 8,229 drugstores with a presence in all 50 states, the District of Columbia, Puerto Rico and the US Virgin Islands. The company is headquartered in Chicago (www.walgreens.com).
BofA Merrill Lynch acted as financial advisor and Sidley Austin acted as legal advisor to Walgreens, and Weil, Gotshal & Manges provided antitrust counsel. MDP was advised by Barclays, Deutsche Bank and Goldman Sachs. Kirkland & Ellis acted as legal advisor to MDP and Ropes & Gray provided regulatory counsel.
© 2015 PEPD • Private Equity’s Leading News Magazine • 1-21-15
