Drugstore juggernaut Walgreens this morning announced that it will acquire online retailer Drugstore.com in a transaction with a total enterprise value of approximately $409 million.
As a result of the merger, Walgreens will acquire the Drugstore.com website in addition to other websites operated by the company, including Beauty.com and SkinStore.com.
Walgreens, which operates 7,689 drugstores across the United States, had fiscal 2010 sales of $67 billion. Walgreens will fund the acquisition with existing cash and anticipates the transaction to close by the end of June 2011.
Founded in 1998, Drugstore.com registered more than $456 million in sales in 2010. Walgreens says it will maintain drugstore.com’s corporate office in Bellevue, Washington, after the merger is completed. Drugstore.com employs approximately 1,000 people.
Under the terms of the agreement, Drugstore.com stockholders will receive $3.8 in cash for each share of stock, which represents an equity value of approximately $429 million. The purchase price per share is a premium of roughly 102 percent over drugstore.com’s 30-day average closing stock price, and a premium of approximately 113 percent over yesterday’s closing price of Drugstore.com’s common stock.
Walgreens President and CEO Greg Wasson, commented:
“This acquisition offers a unique opportunity that will provide us immediate access to more than 3 million savvy, online loyal customers, and will allow us to move even closer to our existing customers through relationships with new vendors and partners, adding approximately 60,000 products to our already strong online offering.
Importantly, drugstore.com’s well-recognized presence in the health, personal care, beauty and vision categories, including such strong websites as drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com, will complement and extend many of our own multi-channel initiatives that have been driving growth in our business.”
Drugstore.com will maintain separate branding of its websites after the merger closes.
Walgreens says it expects the merger to be dilutive to earnings per share in the fourth quarter of fiscal 2011 by approximately 3 cents, and further anticipates the transaction to be dilutive to earnings per share by 3 to 4 cents in fiscal 2012, and 1 to 2 cents in fiscal 2013 because of its intention to reinvest in the business.
drugstore.com, inc. (Pre acquisition ticker Nasdaq:DSCM) is a leading online retailer of health, beauty, clinical skincare, vision, and pharmacy products. Our portfolio of brands includes: drugstore.comâ„¢, Beauty.comâ„¢, SkinStore.comâ„¢, and VisionDirect.comâ„¢. All provide a convenient, private, and informative shopping experience while offering a wide assortment of more than 55,000 non-prescription products at competitive prices. The drugstore.com pharmacy is certified by the National Association of Boards of Pharmacy (NABP) as a Verified Internet Pharmacy Practice Site (VIPPS) and operates in compliance with...
Walgreens (www.walgreens.com) is the nation’s largest drugstore chain with fiscal 2010 sales of $67 billion. The company operates 7,689 drugstores in all 50 states, the District of Columbia and Puerto Rico. Each day, Walgreens provides nearly 6 million customers the most convenient, multi-channel access to consumer goods and services and trusted, cost-effective pharmacy, health and wellness services and advice in communities across America. Walgreens scope of pharmacy services includes retail, specialty, infusion, medical facility and mail service, along with...
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