DEERFIELD, ILL., AND NEW YORK CITY — Deerfield-based pharmacy chain Walgreens has acquired Duane Reade, one of the largest pharmacy chains in the New York City metropolitan area, in a $1.075 billion, all-cash transaction that will give Walgreens a major stake in one of the nation's largest retail markets. The transaction will include all 257 Duane Reade locations, its two distribution centers and the company's corporate office. The deal is expected to close by the end of August. Duane Reade Holdings, which operates the chain, is controlled by affiliates of Oak Hill Capital Partners.
Duane Reade has been operating in the New York City market since 1960. Last year, it posted unaudited net sales of $1.8 billion. The chain has the highest sales per square foot in the retail drugstore industry. In the near term, Walgreens will retain the Duane Reade name, its pharmacy and distribution employees and much of its senior management team. Over time, the two corporate offices will consolidate.
Peter J. Solomon Co. served as financial advisor to Walgreens in the transaction, and legal counsel was provided by Wachtell, Lipton, Rosen & Katz. Goldman Sachs & Co. led the financial advisement team for Oak Hill Capital Partners and Duane Reade, with Bank of America Merrill Lynch providing assistance. Duane Reade's legal counsel was Paul, Weiss, Rifkind Wharton & Garrison.
— Coleman Wood