PJ SOLOMON is acting as financial advisor and Akin Gump Strauss Hauer & Feld LLP is acting as legal advisor to Fred’s. Sidley Austin LLP and Weil Gotshal & Manges LLP are acting as legal advisors to Walgreens.
Walgreens and Fred’s, Inc. (Nasdaq: FRED) have entered into a definitive asset purchase agreement, pursuant to which Walgreens will acquire pharmacy patient prescription files and related pharmacy inventory of 185 Fred’s stores located across 10 Southeastern states.
Under the agreement, the aggregate consideration to be paid by Walgreens to Fred’s is $165M, subject to adjustment, plus an amount equal to the value of related pharmacy inventory.
The transaction is part of a previously announced plan by Fred’s to unlock shareholder value by monetizing non-core assets through strategic transactions. Fred’s will continue to operate its retail stores at most of these locations after the pharmacies close. Once the transaction is complete, Fred’s will continue to operate approximately 162 pharmacies across nearly 600 stores. Fred’s pharmacy staff at the closing locations will have an opportunity to apply for any available positions at Walgreens.
The transaction is subject to the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction or waiver of certain other customary closing conditions. The companies expect the file transfers to begin in the fourth quarter of calendar 2018 and be completed in the first quarter of calendar 2019.
The Akin Gump team advising Fred’s was led by corporate partner David D’Urso (Picture), and included corporate counsel Kim Donnelly Rowe and associate Victoria Chu, antitrust partner Corey Roush, labor and employment partner Nathan Oleson and tax counsel Brandon Morris.
Weil is serving as antitrust counsel to Walgreens Boots Alliance, Inc. with a team including Steven Newborn, partner Steven Bernstein and counsel Vadim Brusser.
Involved fees earner: David D’Urso – Akin Gump; Kimberly Donnelly Rowe – Akin Gump; Victoria Chu – Akin Gump; Corey Roush – Akin Gump; Nathan Oleson – Akin Gump; Brandon Morris – Akin Gump; Steven Newborn – Weil, Gotshal & Manges; Steven Bernstein – Weil, Gotshal & Manges; Vadim Brusser – Weil, Gotshal & Manges;