Walgreens-backed VillageMD to purchase Summit Well being in $9 billion deal

Main care supplier VillageMD, which is backed by Walgreens Boots Alliance Inc, is shopping for pressing care supplier Summit Well being in a deal valued at practically $9 billion, because the No. 2 U.S. pharmacy chain expands its health-care footprint.

Personal fairness agency Warburg Pincus-backed Summit Well being runs an impartial physician-run medical teams, and in addition operates CityMD, which acts as alternate options to hospital emergency division visits.

Walgreens stated on Monday will make investments $3.5 billion by an excellent mixture of debt and fairness to help the acquisition, which is predicted to shut within the first quarter of 2023. The corporate will stay the biggest and consolidating shareholder of VillageMD with about 53% stake.

The deal will even function investments from well being insurer Cigna Corp’s healthcare unit Evernorth, which will even turn into a minority proprietor in VillageMD.

Walgreens additionally raised its fiscal 12 months 2025 gross sales purpose for U.S. health-care enterprise to $14.5 billion to $16.0 billion, from $11.0 billion to $12.0 billion beforehand to account for the deal.

The corporate had invested $5.2 billion final 12 months to lift its stake in VillageMD to 63% from 30%.

The announcement is the most recent consolidation within the U.S. health-care sector. It follows the $4-billion acquisition of primary-care operator 1Life Healthcare Inc and CVS Well being Corp‘s $8 billion buyout of Signify Well being .

Collectively, VillageMD and Summit Well being may have a presence in additional than 680 places.

Summit Well being and CityMD had merged in August 2019, with the corporate now having over 13,000 workers and working in over 370 places.