Fred’s Inc. (NASDAQ: FRED) shares exploded on Monday after the company announced a definitive asset purchase agreement with Walgreens Boots Alliance Inc. (NASDAQ: WBA).
According to the deal, Walgreens will acquire pharmacy patient prescription files and related pharmacy inventory of 185 Fred’s stores located across 10 southeastern states.
Overall, Fred’s is looking to take in about $165 million in total consideration for the deal. Also, 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 roughly 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 companies expect the file transfers to begin in the fourth quarter of calendar 2018 and be completed in the first quarter of calendar 2019.
Richard Ashworth, Walgreens President of Operations, commented:
This agreement increases patient access to Walgreens pharmacies in the Southeastern U.S., and allows us to introduce more people to Walgreens trusted pharmacy services in these communities. We look forward to welcoming Fred’s patients and team members who are hired into available Walgreens positions.
Shares of Fred’s were last seen up about 55% at $2.54, with a consensus analyst price target of $2.00 and a 52-week trading range of $1.30 to $7.63.
Walgreens shares were up 1% at $68.88, in a 52-week range of $59.07 to $83.89. The consensus price target is $71.05 and
Take This Retirement Quiz To Get Matched With A Financial Advisor (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the
advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
